[Federal Register Volume 68, Number 55 (Friday, March 21, 2003)]
[Rules and Regulations]
[Pages 14119-14126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6805]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1308

[DEA-206F]
RIN 1117-AA55


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

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Final rule.

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SUMMARY: The Drug Enforcement Administration (DEA) is adopting as final 
an interim rule exempting from control (i.e., exempting from all 
provisions of the Controlled Substances Act (CSA)) certain items 
derived from the cannabis plant and containing tetrahydrocannabinols 
(THC). Specifically, the interim rule exempted THC-containing 
industrial products, processed plant materials used to make such 
products, and animal feed mixtures, provided they are not used, or 
intended for use, for human consumption (and therefore cannot cause THC 
to enter the human body).

DATES: This final rule becomes effective on April 21, 2003.

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 final rule revises the DEA regulations to add a provision 
exempting 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 final rule are: (i) Paper, rope, and 
clothing made from cannabis stalks; (ii) processed cannabis plant 
materials used for industrial purposes, such as fiber retted from 
cannabis stalks for use in manufacturing textiles or rope; (iii) 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; 
and (iv) personal care products that contain oil from sterilized 
cannabis seeds, such as shampoos, soaps, and body lotions (provided 
that using such personal care products does not cause THC to enter the 
human body).
    This 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 section 811(g)(3). These 
functions vested in the Attorney General by the CSA have been delegated 
to the Administrator and Deputy Administrator of DEA. 21 U.S.C. 871(a); 
28 CFR 0.100(b) and 0.104, appendix to subpart R, sec. 12.

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

    Without the exemptions made by the interim rule, which are adopted 
as final in this rule, a wide variety of legitimate industrial products 
derived from portions of the cannabis plant would be considered 
schedule I controlled substances. For example, paper, rope, and 
clothing (made using fiber from cannabis stalks) and industrial 
solvents, lubricants, and bird seed mixtures (made using sterilized 
cannabis seeds or oil from such seeds) would, in the absence of the 
interim rule, be considered schedule I controlled substances if they 
contained THC. If such products were considered schedule I controlled 
substances, their use would be severely restricted.\1\ Under the 
interim rule, however, which DEA is adopting as final here, DEA 
exempted 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 welfare 
within the meaning of the CSA while striking a fair balance between the 
plain language of the Act and the intent of Congress under prior 
marijuana legislation.
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    \1\ The CSA and DEA regulations permit industrial use of 
schedule I controlled substances, but only under strictly regulated 
conditions.
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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 of the CSA. 
Because of this, there are only two ways that THC may lawfully enter a 
person's body: (1) If the THC is contained in a drug product that has 
been approved by the Food and Drug Administration (FDA) as being safe 
and effective for human use; \2\

[[Page 14120]]

or (2) if an experimental drug containing THC is provided to a research 
subject in clinical research that has been approved by FDA and 
conducted by a researcher registered with DEA.\3\ Disallowing human 
consumption of schedule I controlled substances except in the foregoing 
limited circumstances is an absolute necessity to conform with the CSA 
and protect the public welfare within the meaning of the Act.\4\
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    \2\ 21 U.S.C. 331, 355, 811(b), 812(b). At present, Marinol[reg] 
is the only THC-containing drug product that has been approved for 
marketing by FDA. Marinol[reg] 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[reg] 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[reg] from schedule II to schedule III, thereby lessening the 
CSA regulatory requirements governing its use as medicine. See 64 FR 
35928 (1999).
    \3\ 21 U.S.C. 823(f); 21 CFR 5.10(a)(9), 1301.18, 1301.32.
    \4\ In enacting the CSA, Congress stated: ``The illegal 
importation, manufacture, distribution, and possession and improper 
use of controlled substances have a substantial and detrimental 
effect on the health and general welfare of the American people.'' 
21 U.S.C. 801(2).
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    Where, however, a schedule I controlled substance is contained in a 
product not used for human consumption, the CSA provides DEA with 
discretionary authority to issue regulations exempting such product 
from control.\5\ DEA has carefully considered whether it is appropriate 
to exercise this discretionary authority when it comes to industrial 
``hemp'' products (i.e., products made from portions of the cannabis 
plant excluded from the CSA definition of marijuana). The text of the 
CSA and its legislative history make no mention of industrial uses of 
the cannabis plant. However, DEA has taken into account that, under 
prior legislation (the Marihuana Tax Act of 1937), Congress intended to 
permit the use of certain cannabis-derived industrial products. The 
Senate Report accompanying the 1937 Act stated:
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    \5\ See 21 U.S.C. 811(g)(3); see also 21 U.S.C. 871(b) 
(providing discretionary authority to DEA Administrator to 
``promulgate and enforce any rules, regulations, and procedures 
which he may deem necessary and appropriate for the efficient 
execution of his functions under [the CSA].'').

    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 
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pigeons.

    S. Rep. No. 900, 75th Cong., 1st Sess., at 2-3 (1937). DEA 
recognizes that the intent of Congress in 1937 to allow the foregoing 
industrial ``hemp'' products is no longer controlling because the CSA 
(enacted in 1970) repealed and superseded the 1937 Marihuana Tax Act. 
DEA further recognizes that the allowance that Congress made for such 
products under the now-rescinded Marihuana Tax Act was based on a 1937 
assumption (now refuted) that such products contained none of the 
psychoactive drug now known as THC. (In contrast, when Congress enacted 
the CSA in 1970, it expressly declared that anything containing THC is 
a schedule I controlled substance.) \6\ Still, for the reasons provided 
below, DEA believes it is an appropriate exercise of the 
Administrator's discretionary authority under the CSA to issue an 
exemption allowing the legitimate industrial uses of ``hemp'' that were 
allowed under the 1937 Act. At the same time, DEA has been careful to 
ensure that this exemption comports with the CSA by maintaining the 
rule that no humans may lawfully take THC into their bodies except when 
they are (i) using an FDA-approved drug product or (ii) the subjects of 
FDA-authorized research.
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    \6\ A detailed comparison of the 1937 Marihuana Tax Act and the 
CSA is provided in the October 9, 2001 interpretive rule. 66 FR at 
51530-51531.
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    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 cited above, the exemption of certain ``hemp'' 
products under this final rule is issued pursuant to two CSA 
provisions: 21 U.S.C. 811(g)(3)(B) and 871(b).
    Pursuant to 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 
section 811(g)(3)(B). Rather, as the word ``may'' in the first line of 
section 811(g)(3) indicates, Congress gave DEA discretionary authority 
to issue such exemptions.
    The DEA regulation that implements section 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 section 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 final rule.
    The use of sterilized cannabis seeds \7\ that contain THC in animal 
feed fails to meet the criteria of section 811(g)(3)(B) and section 
1308.23 because this involves the use of a controlled substance (THC) 
in animals.\8\ 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 that are 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 section 
871(b) is not a catchall provision that can be used to justify any 
exemption. For the following

[[Page 14121]]

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 section 871(b).
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    \7\ 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.
    \8\ 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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    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 some THC-containing 
products (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 
section 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 welfare. 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 Rule?

    Under this final 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 Rule?

    Under this final 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 comparison, 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 final rule. In comparison, a personal 
care product that consists solely of oil derived from cannabis seeds 
does not meet the definition of ``processed plant material'' under this 
final rule and, therefore, is not exempted from control.
    ``Animal feed mixture'' is defined under this final 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 fit 
within the definition of ``animal feed mixture'' and are exempted from 
control under this final 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 final 
rule and, therefore, is not exempted from control.)

Which ``Hemp'' Products Are Exempted From Control Under This 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 final 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 final rule, provided they are not 
used, or intended for use, for human consumption: paper, rope, and 
clothing made from fiber derived from cannabis stalks, industrial 
solvents made with oil from cannabis seeds, and bird seed containing 
sterilized cannabis seed mixed with seeds from other plants (or other 
ingredients not derived from the cannabis plant). Personal care 
products (such as lotions and shampoos) made with oil from cannabis 
seeds are also generally exempted, as explained below.

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

    Other than those substances that fit within the exemption being 
issued in

[[Page 14122]]

this final rule, all other portions of the cannabis plant, and products 
made therefrom, that contain any amount of 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 final rule. Therefore, 
this document contains no exhaustive list of ``hemp'' products that are 
not exempted from control under this final rule. Nonetheless, to 
provide some guidance, the following are some of the ``hemp'' products 
that are not exempted from control under this final 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''?

    DEA has not conducted chemical analyses of all of the many and 
varied personal care products that are marketed in the United States, 
such as lotions, moisturizers, soaps, or shampoos that contain oil from 
sterilized cannabis seeds. Indeed, it appears that there is no reliable 
source of information on these products. Accordingly, DEA does not know 
whether every personal care 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 made using cannabis seeds or other portions 
of the plant, one cannot automatically infer, without conducting 
chemical analysis, that the product contains THC.\9\ 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 that definitively answers this question. Therefore, DEA cannot 
state, as a general matter, whether ``hemp'' personal care products are 
exempted from control under this final 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 final 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 
final 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/or designed to be used 
in a way that allows THC to enter the human body, such product is not 
exempted from control under this final rule.
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    \9\ Any product that (i) is made from portions of the cannabis 
plant excluded from the CSA definition of marijuana and (ii) 
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 final 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 final 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 final rule need not obtain 
an express exemption from DEA in order to continue to handle such 
product. Rather, this is a voluntary procedure. 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 final rule is subject to liability under the CSA.

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--natural 
or synthetic--(nor any other controlled substance) is not a controlled 
substance. Accordingly, such substances need not be exempted from 
control under this final rule, since they are, by definition, 
noncontrolled.

What Is the Justification for Issuing the Exemptions Under This Rule?

    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 rule. Otherwise, as provided in the 
CSA and DEA regulations, all products containing any amount of THC are 
schedule I controlled substances. In other words, in the absence of 
this final rule, legitimate industrial ``hemp'' products such as paper, 
rope, clothing, and animal feed mixtures would be schedule I controlled 
substances if they contain THC. Thus, without the exemptions that are 
being finalized in this rule, anyone who sought to import such products 
for legitimate industrial uses would need to obtain a DEA registration 
and an import permit. 21 U.S.C. 952(a)(2), 957(a). Likewise, 
distributors of such products would 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). DEA believes 
that such regulatory requirements are unnecessary to protect the public 
welfare and achieve the goals of the CSA, provided such products are 
not used, or intended for use, for human consumption. Furthermore, DEA 
believes that it would not be an appropriate prioritization of limited 
agency resources to take on the responsibility of regulating these 
products 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 
purposes and structure of the CSA to exempt industrial ``hemp'' 
products, processed plant materials, and animal feed mixtures in the 
manner specified in this final rule.

[[Page 14123]]

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

    In light of the exemptions provided under this rule, the following 
registration requirements should be considered:
    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 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). The circumstances under which DEA may grant 
registrations to handle schedule I controlled substances are limited, 
as set forth in 21 U.S.C. 823.
    In addition, no person may cultivate the cannabis plant for any 
purpose except when expressly registered with DEA to do so. This has 
always been the case since the enactment of the CSA. 21 U.S.C. 822(b), 
823(a); 21 CFR Part 1301; see 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. 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 final rule are not subject to any 
of the CSA requirements, including the requirement of registration. For 
example, a person who imports ``hemp'' clothing is not considered to be 
importing a controlled substance and is, therefore, not subject to any 
of the CSA requirements. Similarly, a person who has imported into the 
United States processed cannabis plant material that is exempted under 
this rule (such as retted fiber) and converts such material into an 
exempted ``hemp'' product (such as clothing) is not considered to be 
manufacturing a controlled substance and, therefore, need not obtain a 
controlled substance manufacturing registration.
    It is worth repeating here that, if a product marketed as a 
``hemp'' product actually contains no THC (or any other controlled 
substance), it is noncontrolled and handlers of the product are not 
subject to any of the CSA provisions, such as the registration 
requirement.

Comments That DEA Received in Response to the Interim Rule

    Following publication of the interim rule, DEA received comments 
from thousands of individuals and groups. The comments were in the form 
of original letters, form letters, petitions, and a cookbook. Those who 
submitted comments included companies that manufacture and distribute 
various ``hemp'' products, associations that represent such 
manufacturers and distributors, domestic and Canadian government 
officials, and individuals. In accordance with the Administrative 
Procedure Act, DEA carefully considered all of the comments it 
received.
    Most of the comments that DEA received relate to both of the rules 
that DEA published on October 9, 2001: (i) DEA 205 (66 FR 51535), a 
proposed rule, which proposed to clarify that the listing of THC 
includes both natural and synthetic THC and (ii) DEA 206 (66 FR 51539), 
an interim rule, which exempted certain THC-containing products and 
plant materials from control. Those comments that DEA received which 
pertain primarily to the interim rule are addressed here. Those 
comments which pertain primarily to the proposed rule are addressed in 
the final DEA 205 rule, which appears in a separate Federal Register 
document that immediately precedes this document. Both DEA 205 and DEA 
206 contain a summary of the pertinent comments, along with an 
explanation of how DEA considered them in deciding to finalize the 
rules.
    The number of individuals and groups that participated in the 
comment process far exceeded the number of different issues raised. The 
issues raised overlapped to a large extent as many persons submitted 
form letters or signed petitions written by groups which themselves 
submitted lengthy comments. In this document, together with the final 
proposed rule, DEA has addressed all the major issues raised by the 
commenters. Some of these issues are addressed above in the text that 
precedes this section. The remaining issues are addressed below.

Comments Regarding Which Products To Exempt From Control

    None of the commenters objected to the basic purpose of this rule: 
To exempt from control certain THC-containing industrial products and 
animal feed mixtures made from ``hemp'' (portions of the cannabis plant 
excluded from the definition of marijuana). To the contrary, all the 
commenters who expressed an opinion on this particular issue agreed 
with these exemptions.\10\ However, many commenters said that DEA 
should go further by also exempting ``hemp'' food and beverage products 
that contain THC. DEA declined to adopt this suggestion for the reasons 
provided herein.
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    \10\ Some commenters were under the mistaken impression that DEA 
failed to exempt any products from control. These commenters asked 
DEA to exempt what DEA had already exempted under the interim rule. 
For example, several commenters objected to DEA's supposed failure 
to exempt ``hemp'' clothing and paper, even though the interim rule 
stated repeatedly that such products were being exempted.
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    Those commenters who requested that DEA exempt THC-containing 
``hemp'' food and beverage products made two main claims in support of 
this request: (i) That ``hemp'' foods and beverages contain only 
minimal amounts of THC, which, they asserted, cannot cause any 
psychoactive effects; and (ii) that the oil from ``hemp'' seeds 
(sterilized cannabis seeds) provides nutritional value and is a safe 
food ingredient.\11\
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    \11\ Some commenters also expressed concern about the economic 
impact of disallowing THC-containing ``hemp'' food and beverage 
products. This issue is addressed in the final 205 rule, in the 
regulatory certifications.
---------------------------------------------------------------------------

    As to the issue of THC content, many of the comments appeared to be 
asking DEA simply to assume that the placement of the word ``hemp'' on 
the label of a food or beverage product automatically means that the 
product contains a certain low amount of THC. In fact, the existence of 
the word ``hemp'' on the label of a food container provides no 
definitive proof of its contents. The FDA cannot and does not evaluate 
the contents of every food product sold in the United States. Since 
there is no reliable information about the contents of all foods and 
beverages marketed as ``hemp'' products, it cannot automatically be 
assumed that all such products will never cause a psychoactive effect 
or a positive drug test for THC.
    One scientific study published in 1997 examined ``hemp'' salad oil 
(containing oil from cannabis seeds) sold in ``hemp shops'' and health 
food stores in Switzerland. The authors of the study stated that all 
the human subjects who ate the cannabis seed oil reported THC-specific 
psychotropic symptoms and had urine samples positive for THC.\12\ In 
citing this study, DEA is not

[[Page 14124]]

suggesting that all ``hemp'' food and beverage products cause 
psychoactive effects. Rather, DEA mentions this study in response to 
the assertions made by some commenters that eating ``hemp'' foods 
cannot possibly cause psychoactive effects.\13\
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    \12\ T. Lehman, Institute of Pharmacy, University of Bern, et 
al., Excretion of Cannabinoids in Urine after Ingestion of Cannabis 
Seed Oil, Journal of Analytical Toxicology, vol. 21 (September 
1997).
    \13\ In a later study, financed by various ``hemp'' companies, 
human subjects were given oil from cannabis seeds containing lower 
doses of THC than in the Lehman study. G. Leson, et al., Evaluating 
the Impact of Hemp Food Consumption on Workplace Drug Tests, Journal 
of Analytic Toxicology, vol. 25 (November/December 2001). The 
authors of this study reported that ingestion of cannabis seed oil 
containing these lower doses of THC resulted in little or no 
positive screening for THC, depending on the amount of THC consumed 
and the sensitivity of the urine testing. Companies who financed 
this study assert that the lower THC content given to the subjects 
of this study is commensurate with the current methods employed by 
these companies for cleaning the cannabis seeds before removing the 
oil from them for use in food products.
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    Attached to one of the comments was another study, which was also 
financed by various ``hemp'' companies. This study, entitled 
``Assessment of Exposure to and Human Health Risk from THC and other 
cannabinoids in hemp foods,'' reached similar conclusions about the 
reduced levels of THC in currently marketed ``hemp'' foods and the 
diminished likelihood of testing positive for THC when consuming such 
products.
    As for the comments claiming that ``hemp'' foods provide essential 
nutrients and are safe to eat, it is not DEA's role under the CSA to 
assess the nutritional value or safety of foods.\14\ Regardless of 
whether the oil from cannabis seeds contains certain nutrients,\15\ the 
CSA does not provide for DEA to exempt food products that contain THC. 
As explained above and in the text accompanying the interim rule, the 
CSA prohibits human consumption of ``any quantity'' of a schedule I 
hallucinogenic substance outside of an FDA-approved product or FDA-
approved research. Other than drugs that have been approved by the FDA 
for prescription use, or drugs that may be lawfully sold over the 
counter without a prescription, DEA may not exempt controlled 
substances to allow them to be used for human consumption--even in the 
case of products that supposedly contain only ``trace amounts'' of a 
controlled substance. 21 U.S.C. 811(g). Thus, DEA may not, as some 
commenters proposed, pick an arbitrary cutoff line allowing a certain 
percentage of THC in foods and beverages. Moreover, notwithstanding the 
statutory prohibition, DEA believes it would be inappropriate to 
attempt to establish an acceptable level of schedule I hallucinogens in 
food products. For example, it would not be appropriate to allow food 
products to contain ``trace amounts'' of such other schedule I 
hallucinogens as LSD or MDMA (``ecstasy''). Finding that it is contrary 
to the public welfare to allow human consumption of ``any quantity'' of 
schedule I hallucinogens, Congress did not give DEA the authority to 
determine what constitutes a ``safe amount'' of such drugs in food.\16\
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    \14\ In the context of the CSA, the public ``safety'' (and DEA's 
role therein) is implicated by the use of controlled substances for 
other than a legitimate medical purpose or in any other manner not 
authorized by the CSA.
    \15\ Although this rule is not a food safety measure, because 
DEA received so many comments regarding this issue, some members of 
the public may be interested in the following information. Under the 
Federal Food, Drug, and Cosmetic Act, a substance that is added to 
food is not subject to the requirement of premarket approval if its 
safety is generally recognized among qualified scientific experts 
under the conditions of its intended use. 21 U.S.C. 321(s). A 
substance added to a food may be considered ``generally recognized 
as safe'' (GRAS) through experience based on ``common use in food,'' 
which requires a substantial history of consumption for food use by 
a significant number of consumers. 21 CFR 170.3(f), (h); 21 CFR 
170.30. The FDA evaluated an industry submission claiming GRAS 
status for certain food uses of ``hempseed oil'' and expressly 
stated that it did not believe the submission provided a sufficient 
basis to classify ``hempseed oil'' as GRAS through experience based 
on common use in food. See FDA Center for Food Safety & Applied 
Nutrition, Office of Premarket Approval, Agency Response Letter, 
GRAS Notice No. GRN 00035 (August 24, 2000), reproduced at 
www.cfsan.fda.gov/rdb/opa-g035.html. In making this determination, 
the FDA did not evaluate whether there would be a basis for GRAS 
status through scientific procedures or whether ``hempseed oil'' 
would meet the standard for premarket approval as a food additive. 
Id.
    \16\ To establish a violation of the CSA, the government does 
not have to prove that the controlled substance in question was of 
sufficient quantity to produce a psychoactive effect. United States 
v. Nelson, 499 F.2d 965 (8th Cir. 1974).
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    Accordingly, DEA has limited the exemptions provided in this final 
rule to those cannabis-derived ``hemp'' products that do not cause THC 
to enter the human body.

Comments Regarding Testing Methods To Evaluate THC Content of Foods and 
Beverages

    Many commenters asked the agency to indicate how it will determine 
whether a food or beverage product contains THC. Under federal law, it 
is legally sufficient to demonstrate a violation of the CSA based on 
the presence of any measurable amount of a prohibited controlled 
substance.\17\ Thus, the questions raised by the commenters are: ``What 
testing methods will DEA utilize to determine whether a food product 
contains a measurable amount of THC and how sensitive are such 
methods?''
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    \17\ See, e.g., United States v. Holland, 884 F.2d 354, 357 (8th 
Cir. 1989), cert. denied, 493 U.S. 997 (1989); see also 21 U.S.C. 
812(c), schedule I(c) (listing ``any material, compound, mixture, or 
preparation, which contains any quantity'' of hallucinogenic 
substances in schedule I).
---------------------------------------------------------------------------

    DEA will utilize testing assays or protocols used in standard 
analytical laboratories that have demonstrated valid and reliable 
sensitivity for the measurements of THC.\18\ The methodology, level of 
sensitivity, and degree of testing accuracy in the fields of analytical 
and forensic chemistry have evolved since the first discovery of THC in 
the 1960s. A variety of analytical equipment, testing methodologies, 
and protocols are described in the published scientific literature.\19\ 
Such methods may include (but are not limited to) gas chromatography, 
liquid chromatography, and mass spectrometry analyses. DEA has not, and 
will not, utilize any one method to the exclusion of others.\20\
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    \18\ In this context, ``valid'' means that the technique 
measures what it is designed to measure, and ``reliable'' means that 
the technique can be replicated by other laboratories.
    \19\ See, e.g., M.V. Doig & R. Andela, Analysis of 
pharmacologically active cannabinoids by GC-MS, Chromatographia 52 
(Supp.): S101-S102 (2000); P.D. Felgate & A.C. Dinan, The 
determination of delta-9-tetrahydrocannabinol and 11-Nor-9-carboxy-
delta-9-tetrahydrocannabinol in whole blood using solvent extraction 
combined with polar solid-phase extraction, Journal of Analytical 
Toxicology 24:127-132 (2000); K. Ndjoko, et al., Analysis of 
cannabinoids by liquid chromatography-thermospray mass spectrometry 
and liquid chromatography-tandem mass spectrometry, Chromatographia 
47:72-76 (1998); B.J. Gudzinowicz & M.J. Gudzinowicz, Analysis of 
drugs and metabolites by gas chromatography-mass spectrometry, 
Volume 7: Natural, pyrolytic, and metabolic products of tobacco and 
marijuana, NY: Marcel Dekker, Inc. (1980).
    \20\ What constitutes the appropriate method of testing may vary 
depending on the circumstances. In any criminal prosecution, civil 
or administrative action, or other legal proceeding arising under 
the CSA, where the government must prove the presence of a 
controlled substance, the government may do so by the introduction 
of any evidence sufficient under law to prove such fact. See, e.g., 
United States v. Bryce, 208 F.3d 346, 352-354 (2d Cir. 2000).
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    The lower limit of detectability of these assays can vary according 
to equipment, methodologies, and the form of the sample. Nonetheless, 
using currently available analytical methodologies and extraction 
procedures, it is reasonable to reproducibly and accurately detect THC 
at or below 1 part per million in cannabis bulk materials or products. 
Should more sensitive assays and analytical techniques be developed in 
the future, DEA will refine its testing methods accordingly.
    Some companies that handle ``hemp'' food products have asked DEA 
whether the agency would test the companies' products for THC content. 
It is not

[[Page 14125]]

within DEA's authority to serve as such a testing laboratory for 
private entities. Nor would it be appropriate for DEA to certify 
laboratories for these analyses. Manufacturers and distributors of 
``hemp'' food and beverage products may, of course, conduct their own 
testing to determine to their own satisfaction that their products 
contain no THC. However, they are under no obligation to do so. Whether 
or not they conduct such testing, the law remains the same: if a food 
or beverage product contains any measurable amount of THC, it is an 
illegal schedule I controlled substance; if it contains no THC, it is a 
legal, noncontrolled substance.

Comments Regarding Drug Screening

    Several commenters asserted that, in deciding whether or not to 
exempt THC-containing food and beverage products, DEA should not 
concern itself with the possibility that persons who eat such products 
then undergo drug screening might test positive for THC. Some of these 
commenters suggested that ``hemp'' food and beverage manufacturers have 
taken steps to ensure that the amount of THC in their products is low 
enough to avoid causing a positive drug screen. Given these comments, 
it must be emphasized that, while effective drug screening in 
appropriate circumstances is of concern to DEA and was part of the 
agency's overall consideration, the ultimate decision about which 
products to exempt from control did not turn on drug testing 
considerations. Rather, as explained above, DEA exempted certain 
products to the extent permissible by the CSA and consistent with the 
public welfare within the meaning of the Act.
    Although drug testing was not the basis for the exemptions, in view 
of the comments about drug testing, it is worth reiterating that there 
are no uniform standards of what constitutes a ``hemp'' product. It 
cannot be said that, merely because a product has the word ``hemp'' on 
the label, it will necessarily contain a certain low amount of THC. 
Therefore, it cannot automatically be said that a food or beverage 
product marketed as containing ``hemp'' will never cause a positive 
drug test for THC. In fact, as noted above, one published scientific 
study found that eating ``hempseed'' salad oil (of a variety sold in 
``hemp shops'' in Switzerland) did cause human research subjects to 
test positive for THC.

Comments Regarding the Cultivation of Cannabis for Industrial Purposes

    Some commenters asserted that the United States should promote the 
cultivation of cannabis for industrial purposes based on economic and 
environmental considerations. These commenters seemed to misunderstand 
the nature of the rules being finalized today. The rules do not impose 
restrictions on, or even address, the cultivation of cannabis. Rather, 
as the text accompanying the rules makes clear, the rules clarify which 
cannabis-derived products are controlled and which are exempted from 
control.
    As stated above, it has always been the case since the enactment of 
the CSA in 1970 that any person who seeks to lawfully grow cannabis for 
any purpose (including the production of ``hemp'' for industrial 
purposes) must obtain a DEA registration. This requirement remains in 
effect and is not modified by the rules DEA is finalizing today.

Regulatory Certifications

Economic Impact of This Rule

    This rule allows economic activity that would otherwise be 
prohibited. As has now been made clear under the DEA regulations being 
finalized today, all products that contain any amount of THC are 
schedule I controlled substances unless they are specifically listed in 
another schedule or exempted from control. Thus, without the exemptions 
provided in this final 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 rule, however, 
most industrial ``hemp'' products are exempt from all provisions of the 
CSA and DEA regulations. Thus, this 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 Acting 
Administrator hereby certifies that this 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, 
a final regulatory flexibility analysis is not required for this final 
rule.

Executive Order 12866

    This rule has been drafted and reviewed in accordance with 
Executive Order 12866, Regulatory Planning and Review, section 1(b), 
Principles of Regulation. This rule has been determined to be a 
``significant regulatory action'' under Executive Order 12866, section 
3(f). Accordingly, this rule has been reviewed by the Office of 
Management and Budget for purposes of Executive Order 12866.

Executive Order 13132

    This 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 rule does not have federalism implications warranting 
the application of Executive Order 13132.

Executive Order 12988--Civil Justice Reform

    This 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 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 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-based enterprises in domestic and 
export markets. Accordingly, under the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA), this is not a major rule as 
defined in 5 U.S.C. 804. Therefore, the provisions of SBREFA relating 
to major rules are inapplicable to this rule. However, a copy of this 
rule has been sent to the Office of Advocacy, Small Business 
Administration. Further, a copy of this rule will be 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 rule does not involve collection of information within the 
meaning of the Paperwork Reduction Act of 1995.

[[Page 14126]]

List of Subjects in 21 CFR Part 1308

    Administrative practice and procedure, Drug traffic control, 
Narcotics, Prescription drugs.

Final 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 and Deputy Administrator 
pursuant to section 501(a) (21 U.S.C. 871(a)) and as specified in 28 
CFR 0.100, the Acting Administrator hereby orders that the interim rule 
amending title 21 of the Code of Federal Regulations, part 1308, to 
include new Sec.  1308.35, which was published at 66 FR 51539, on 
October 9, 2001, is adopted as a final rule without change.

    Dated: March 18, 2003.
John B. Brown III,
Acting Administrator.
[FR Doc. 03-6805 Filed 3-20-03; 8:45 am]
BILLING CODE 4410-09-P