[Federal Register Volume 81, Number 156 (Friday, August 12, 2016)]
[Rules and Regulations]
[Pages 53846-53848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17955]



  Federal Register / Vol. 81 , No. 156 / Friday, August 12, 2016 / 
Rules and Regulations  

[[Page 53846]]


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 DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1301

[Docket No. DEA-447]


Applications To Become Registered Under the Controlled Substances 
Act To Manufacture Marijuana To Supply Researchers in the United States

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Policy statement.

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SUMMARY: To facilitate research involving marijuana and its chemical 
constituents, DEA is adopting a new policy that is designed to increase 
the number of entities registered under the Controlled Substances Act 
(CSA) to grow (manufacture) marijuana to supply legitimate researchers 
in the United States. This policy statement explains how DEA will 
evaluate applications for such registration consistent with the CSA and 
the obligations of the United States under the applicable international 
drug control treaty.

DATES: August 12, 2016.

FOR FURTHER INFORMATION CONTACT: Michael J. Lewis, Office of Diversion 
Control, Drug Enforcement Administration; Mailing Address: 8701 
Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-
6812.

SUPPLEMENTARY INFORMATION:

Background

Reasons for This Policy Statement

    There is growing public interest in exploring the possibility that 
marijuana or its chemical constituents may be used as potential 
treatments for certain medical conditions. The Federal Food, Drug and 
Cosmetic Act requires that before a new drug is allowed to enter the 
U.S. market, it must be demonstrated through adequate and well-
controlled clinical trials to be both safe and effective for its 
intended uses. Congress long ago established this process, recognizing 
that it was essential to protect the health and welfare of the American 
people.
    Although no drug product made from marijuana has yet been shown to 
be safe and effective in such clinical trials, DEA--along with the Food 
and Drug Administration (FDA) and the National Institutes of Health 
(NIH)--fully supports expanding research into the potential medical 
utility of marijuana and its chemical constituents.\1\
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    \1\ There are two FDA-approved drugs that contain a synthetic 
form of dronabinol, which is one of the chemicals found in 
marijuana. These drugs are Marinol (which the FDA approved for the 
treatment of nausea and vomiting associated with cancer 
chemotherapy, and for the treatment of anorexia associated with 
weight loss in patients with AIDS) and Syndros (which was approved 
for the same indications as Marinol).
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    There are a variety of factors that influence whether and to what 
extent such research takes place. Some of the key factors--such as 
funding--are beyond DEA's control.\2\ However, one of the ways DEA can 
help to facilitate research involving marijuana is to take steps, 
within the framework of the CSA and U.S. treaty obligations, to 
increase the lawful supply of marijuana available to researchers.
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    \2\ Funding may actually be the most important factor in whether 
research with marijuana (or any other experimental drug) takes 
place. What appears to have been the greatest spike in marijuana 
research in the United States occurred shortly after the State of 
California enacted legislation in 1999 to fund such research. 
Specifically, in 1999, California enacted a law that established the 
``California Marijuana Research Program'' to develop and conduct 
studies on the potential medical utility of marijuana. Cal. Health & 
Safety Code Sec.  11362.9. The state legislature appropriated a 
total of $9 million for the marijuana research studies. Over the 
next five years, DEA received applications for registration in 
connection with at least 17 State-sponsored pre-clinical or clinical 
studies of marijuana (all of which DEA granted). 74 FR 2101, 2105 
(2009). However, it appears that once the State stopped funding the 
research, the studies ended.
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    For nearly 50 years, the United States has relied on a single 
grower to produce marijuana used in research. This grower operates 
under a contract with the National Institute on Drug Abuse (NIDA). This 
longstanding arrangement has historically been considered by the U.S. 
Government to be the best way to satisfy our nation's obligations under 
the applicable international drug control treaty, as discussed in more 
detail below. For most of the nearly 50 years that this single 
marijuana grower arrangement has been in existence, the demand for 
research-grade marijuana in the United States was relatively limited--
and the single grower was able to meet such limited demand. However, in 
recent years, there has been greater public interest in expanding 
marijuana-related research, particularly with regard to certain 
chemical constituents in the plant known as cannabinoids.
    The term ``cannabinoids'' generally refers to those chemicals 
unique to the cannabis plant (marijuana).\3\ To date, more than 100 
different cannabinoids have been found in the plant. One such 
cannabinoid--known as cannabidiol or CBD--has received increased 
attention in recent years. Although the effects of CBD are not yet 
fully understood by scientists, and research is ongoing in this area, 
some studies suggest that CBD may have uses in the treatment of 
seizures and other neurological disorders. A growing number of 
researchers have expressed interest in conducting research with 
extracts of marijuana that have a particular percentage of CBD and 
other cannabinoids. DEA fully supports research in this area. Based on 
discussions with NIDA and FDA, DEA has concluded that the best way to 
satisfy the current researcher demand for a variety of strains of 
marijuana and cannabinoid extracts is to increase the number of 
federally authorized marijuana growers. To achieve this result, DEA, in 
consultation with NIDA and FDA, has developed a new approach to allow 
additional marijuana growers to apply to become registered with DEA, 
while upholding U.S. treaty obligations and the CSA. This policy 
statement explains the new approach, provides details about the process 
by which potential growers may apply for a DEA registration, and 
describes the steps they must take to ensure their activity will be 
carried out in conformity with U.S. treaty obligations and the CSA.
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    \3\ An acceptable and broader definition of ``cannabinoids'' 
includes not only those chemicals unique to the cannabis plant but 
also their derivatives and transformation products.
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    The historical system, under which NIDA relied on one grower to 
supply marijuana on a contract basis, was designed primarily to supply 
marijuana for use in federally funded research--not for commercial 
product development. Thus, under the historical system, there was no 
clear legal pathway for commercial enterprises to produce marijuana for 
product development. In contrast, under the new approach explained in 
this policy statement, persons may become registered with DEA to grow 
marijuana not only to supply federally funded or other academic 
researchers, but also for strictly commercial endeavors funded by the 
private sector and aimed at drug product development. Likewise, under 
the new approach, should the state of scientific knowledge advance in 
the future such that a marijuana-derived drug is shown to be safe and 
effective for medical use, pharmaceutical firms will have a legal means 
of producing such drugs in the United States--independent of the NIDA 
contract process.

Legal Considerations

Applicable CSA Provisions

    Under the CSA, all persons who seek to manufacture or distribute a 
controlled substance must apply for a DEA registration. 21 U.S.C. 
822(a)(1). Applications by persons seeking to grow

[[Page 53847]]

marijuana to supply researchers are governed by 21 U.S.C. 823(a); see 
generally 76 FR 51403 (2011); 74 FR 2101 (2009). Under section 823(a), 
for DEA to grant a registration, two conditions must be satisfied: (1) 
The registration must be consistent with the public interest (based on 
the enumerated criteria listed in section 823(a)) and (2) the 
registration must be consistent with U.S. obligations under the Single 
Convention on Narcotic Drugs, 1961 (Single Convention). An applicant 
seeking registration under section 823(a) has ``the burden of proving 
that the requirements for such registration pursuant to [this section] 
are satisfied.'' 21 CFR 1301.44(a). Although each application for 
registration that DEA receives will be evaluated individually based on 
its own merit, some general considerations warrant mention here.
    First, while it is DEA's intention to increase the number of 
registered marijuana growers who will be supplying U.S. researchers, 
the CSA does not authorize DEA to register an unlimited number of 
manufacturers. As subsection 823(a)(1) provides, DEA is obligated to 
register only the number of bulk manufacturers of a given schedule I or 
II controlled substance that is necessary to ``produce an adequate and 
uninterrupted supply of these substances under adequately competitive 
conditions for legitimate medical, scientific, research, and industrial 
purposes.'' See 74 FR at 2127-2130 (discussing meaning of subsection 
823(a)(1)). This provision is based on the long-established principle 
that having fewer registrants of a given controlled substances tends to 
decrease the likelihood of diversion.
    Consistent with subsection 823(a)(1), DEA will evaluate each 
application it receives to determine whether adding such applicant to 
the list of registered growers is necessary to provide an adequate and 
uninterrupted supply of marijuana (including extracts and other 
derivatives thereof) to researchers in the United States.\4\
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    \4\ In making this determination, DEA will consult with NIH and 
FDA, as warranted.
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    Second, as with any application submitted pursuant to section 
823(a), in determining whether the proposed registration would be 
consistent with the public interest, among the factors to be considered 
are whether the applicant has previous experience handling controlled 
substances in a lawful manner and whether the applicant has engaged in 
illegal activity involving controlled substances. In this context, 
illegal activity includes any activity in violation of the CSA 
(regardless of whether such activity is permissible under State law) as 
well as activity in violation of State or local law. While past illegal 
conduct involving controlled substances does not automatically 
disqualify an applicant, it may weigh heavily against granting the 
registration.
    Third, given the in-depth nature of the analysis that the CSA 
requires DEA to conduct in evaluating these applications, applicants 
should anticipate that, in addition to the information requested in the 
application itself, they will be asked to submit other information 
germane to the application in accordance with 21 CFR 1301.15. This will 
include, among other things, detailed information regarding an 
applicant's past experience in the manufacture of controlled 
substances. In addition, applicants will be asked to provide a written 
explanation of how they believe they would be able to augment the 
nation's supply of research-grade marijuana within the meaning of 
subsection 823(a)(1). Applicants may be asked to provide additional 
written support for their application and other information that DEA 
deems relevant in evaluating the application under section 823(a).

Treaty Considerations

    As stated above, DEA may only issue a registration to grow 
marijuana to supply researchers if the registration is consistent with 
U.S. obligations under the Single Convention. Although this policy 
document will not list all of the applicable requirements of the Single 
Convention,\5\ the following is a summary of some of the key 
considerations.
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    \5\ A detailed explanation of the relevant Single Convention 
requirements can be found in 74 FR at 2114-2118.
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    Under articles 23 and 28 of the Single Convention, a party (i.e., a 
country that is a signatory to the treaty) that allows the cultivation 
of cannabis for lawful uses (e.g., FDA-authorized clinical trials) 
must:
    (a) Designate the areas in which, and the plots of land on which, 
cultivation of the cannabis plant for the purpose of producing cannabis 
shall be permitted;
    (b) License cultivators authorized to cultivate cannabis;
    (c) Specify through such licensing the extent of the land on which 
the cultivation is permitted;
    (d) Purchase and take physical possession of all cannabis crops 
from all cultivators as soon as possible, but not later than four 
months after the end of the harvest; and
    (e) Have the exclusive right of importing, exporting, wholesale 
trading and maintaining stocks of cannabis.
    As DEA has stated in a prior publication, DEA carries out those 
functions of article 23, paragraph 2, that are encompassed by the DEA 
registration system (paragraphs (a) through (c) above), and NIDA 
carries out those functions relating to purchasing the marijuana and 
maintaining a monopoly over the wholesale distribution (paragraphs (d) 
and (e) above).\6\ 76 FR at 51409.
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    \6\ In accordance with the CSA, DEA carries out functions that 
are indirectly related to those specified in article 23, paragraph 
2(e). For example, DEA controls imports and exports of cannabis 
through the CSA registration and permitting system.
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    As indicated, DEA's historical approach to ensuring compliance with 
the foregoing treaty requirements was to limit the registration of 
marijuana growers who supply researchers to those entities that operate 
under a contract with NIDA. Under this historical approach, the grower 
could be considered an extension of NIDA and thus all marijuana 
produced by the grower was effectively owned by NIDA, with NIDA 
controlling all distribution to researchers.
    However, as further indicated, DEA has concluded, based on 
discussions with NIDA and FDA, that it would be beneficial for research 
to allow additional marijuana growers outside the NIDA-contract system, 
provided this could be accomplished in a manner consistent with the CSA 
and the treaty. Toward this end, DEA took into account the following 
statement contained in the official commentary to the Single 
Convention:

    Countries . . . which produce . . . cannabis . . . , [i]n so far 
as they permit private farmers to cultivate the plants . . . , 
cannot establish with sufficient exactitude the quantities harvested 
by individual producers. If they allowed the sale of the crops to 
private traders, they would not be in a position to ascertain with 
reasonable exactitude the amounts which enter their controlled 
trade. The effectiveness of their control r[eacute]gime would thus 
be considerably weakened. In fact, experience has shown that 
permitting licensed private traders to purchase the crops results in 
diversion of large quantities of drugs into illicit channels. . . . 
[T]he acquisition of the crops and the wholesale and international 
trade in these agricultural products cannot be entrusted to private 
traders, but must be undertaken by governmental authorities in the 
producing countries. Article 23 . . . and article 28 . . . therefore 
require a government monopoly of the wholesale and international 
trade in the agricultural product in question in the country which 
authorizes its production.

Commentary at 278

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    Given the foregoing considerations, DEA believes it would be 
consistent with the purposes of articles 23 and 28 of the Single 
Convention for DEA to register marijuana growers outside of the NIDA-
contract system to supply researchers, provided the growers agree that 
they may only distribute marijuana with prior, written approval from 
DEA. In other words, in lieu of requiring the growers to operate under 
a contract with NIDA, a registered grower will be permitted to operate 
independently, provided the grower agrees (through a written memorandum 
of agreement with DEA) that it will only distribute marijuana with 
prior, written approval from DEA. DEA believes this new approach will 
succeed in avoiding one of the scenarios the treaty is designed to 
prevent: Private parties trading in marijuana outside the supervision 
or direction of the federal government.
    Also, consistent with the purposes and structure of the CSA, 
persons who become registered to grow marijuana to supply researchers 
will only be authorized to supply DEA-registered researchers whose 
protocols have been determined by the Department of Health and Human 
Services (HHS) to be scientifically meritorious. See 21 U.S.C. 823(f). 
In 2015, HHS announced the details of its current policy for evaluating 
the merits of research protocols involving marijuana. 80 FR 35960 
(2015).
    Finally, potential applicants should note that any entity granted a 
registration to manufacture marijuana to supply researchers will be 
subject to all applicable requirements of the CSA and DEA regulations, 
including those relating to quotas, record keeping, order forms, 
security, and diversion control.

How To Apply for a Registration

    Persons interested in applying for a registration to become a bulk 
manufacturer of marijuana to supply legitimate researchers can find 
instructions and the application form by going to the DEA Office of 
Diversion Control Web site registration page at 
www.deadiversion.usdoj.gov/drugreg/index.html#regapps. Applicants will 
need to submit Form 225.

Note Regarding the Nature of This Document

    This document is a general statement of DEA policy. While this 
document reflects how DEA intends to implement the relevant statutory 
and regulatory provisions, it does not establish a rule that is binding 
on any member of the public. Any person who applies for a registration 
to grow marijuana (as with any other applicant for registration under 
the CSA) is entitled to due process in the consideration of the 
application by the Agency. To ensure such due process, the CSA provides 
that, before taking action to deny an application for registration, DEA 
must serve upon the applicant an order to show cause why the 
application should not be denied, which shall provide the applicant 
with an opportunity to request a hearing on the application in 
accordance with the Administrative Procedure Act. 21 U.S.C. 824(c).

    Dated: July 25, 2016.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2016-17955 Filed 8-11-16; 8:45 am]
 BILLING CODE 4410-09-P