US APPEALS COURT KILLS DEA INTERPRETIVE RULE BANNING HEMP FOODS

But More Battles Remain

The hemp industry Monday won another in a string of victories in its
two-year-old legal battle with the Drug Enforcement Administration
(DEA) over the agency's effort to block the sale and possession of
foods containing hemp products. The 9th Circuit Court of Appeals
overturned the DEA's interpretive rule barring hemp foods, ruling that
the agency violated its own rulemaking procedures by failing to give
advance warning or allow for public comment before it promulgated the
rule in October 2001.

Writing for the majority, Judge Betty Fletcher said, "Because the DEA
rule is inconsistent with the THC regulation at the time of
promulgation, it is a procedurally invalid legislative rule, not an
interpretive rule. The petition requesting that we declare the rule to
be invalid and unenforceable is granted."

But while the ruling kills the DEA's interpretive rule barring an appeal to
the Supreme Court, the agency's later Final Rule banning hemp foods still
stands and the multi-million dollar hemp foods industry remains in danger.
That rule is also being challenged by the industry via the Hemp Industries
Association (HIA), which represents hemp manufacturers and retailers.
Neither rule has actually been implemented because the HIA has successfully
sought restraining orders to block them, and despite the DEA's best
efforts, hemp foods remain legal and available to the public. [Ed: And
tasty, too.]

In its 2-1 opinion, the 9th Circuit also made findings that are
causing some hemp supporters to see signs of a favorable ruling on the
DEA's Final Rule. The court found that that DEA itself in 1975 had
published in the Federal Register a statement that non-viable hemp
seed was exempt from the Controlled Substances Act (CSA) and that the
listing for THC in the drug schedules only referred to synthetic THC.
The DEA has argued that the CSA allows it to ban hemp-based foods with
even trace elements of naturally occurring THC.

"This is definitely a huge victory," said David Bronner of Dr.
Bronner's Magic Soaps (http://www.drbronner.com), who heads the HIA's
hemp foods war council. "First of all, the court struck down the
interpretive rule, in which the DEA claimed that the CSA covered
hempseed oil along with fiber and stalk, because the agency had not
done proper rulemaking. But as important," Bronner told DRCNet, "the
court also said that the CSA only covers synthetic THC. What's great
about this is that the court made findings that speak to congressional
intent to exempt hempseed and oil from the CSA. That means there is no
room for agency discretion; it can't countermand congressional intent
with its rulemaking, and that means it looks good for our case against
the Final Rule. The court really handed us a nuclear bomb here," he
added.

HIA lead attorney Joe Sandler was a bit more circumspect. "While this
was about the interpretive rule, not the final rule, the majority
opinion contains language indicating that two of the judges do
understand that hempseed and oil are not covered by the CSA, trace
elements of THC notwithstanding," he told DRCNet. "Those same judges
will be hearing arguments on the final rule case," he said, "but I
don't make predictions."

But one member of the three-judge panel that heard the case, Judge
Alex Kozinski, issued a sharp dissent calling the ruling "moot" and
"gratuitous" and predicted that the ban will stand. "The most likely
outcome," he wrote, "is that we will uphold the regulation."

Kozinski was miffed because HIA insisted that the decision on the
interpretive rule be made because the DEA would not agree to
acknowledge the rule was moot, said Bronner. "The DEA is so slimy and
untrustworthy that it is conceivable that it could still come back and
harass the marketplace even if its Final Rule is thrown out, and when
the DEA failed to concede the interpretive rule was moot, we felt we
had to cover all the bases."

As for Kozinski's bet that the rule banning hemp foods would stand,
Sandler blamed judicial ignorance. "In his dissent, Judge Kosinski
said in passing that it seemed likely the court would uphold the Final
Rule because of the presumption that the courts should give great
deference to the agency doing the interpretation of the law," he
explained. "But as we explained in our brief for the court on the
Final Rule case, which Kosinski has probably not yet had a chance to
read, there is nothing to interpret here. The plain language of the
Controlled Substances Act excludes hempseed and oil and does not bring
them under its purview as THC," he told DRCNet.

Oral arguments before the 9th Circuit are set for September 17, with a
ruling expected sometime before year's end.

Visit http://www.votehemp.com/PDF/HIAvDEA_9th_opinion.pdf to read the
court's opinion online.

Visit http://www.votehemp.com/PDF/HIAvDEA_finalrules_petition.pdf to
read the HIA brief and other documents in the Final Rule case.

Visit http://www.thehia.org to learn more about the Hemp Industries
Association and their upcoming conference in Lakota Sioux country,
South Dakota, next month.