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CBD Industry Takes the Fight to the DEA

Janel Ralph

CBD

CBD Industry Takes the Fight to the DEA

Harmony, RE: Botanicals CEO Janel Ralph Leads Industry Lawsuit Challenging DEA’s Proposed Rules on Hemp

By Steven Hoffman

The U.S. Drug Enforcement Administration (DEA) just made the wrong person mad.

By issuing in late August an interim final rule to regulate hemp that is separate from USDA’s, many hemp business leaders feel DEA’s IFR could seriously threaten the hemp extracts market. 

Enough so that Janel Ralph, CEO of two leading hemp extract brands including Harmony (aka Palmetto Harmony) and RE: Botanicals, has taken the initiative to file a federal lawsuit challenging DEA’s rule and perceived interference in the industrial hemp market.

In particular, manufacturers are challenging DEA’s rule stating that any hemp product exceeding the federal limit of 0.3% THC during manufacturing is considered a Schedule I controlled substance, even if the final product contains less than the 0.3% limit.

The petition was filed on September 18, 2020, in the U.S. Court of Appeals for the District of Columbia Circuit by RE Botanicals, Inc. in partnership with the Hemp Industries Association. A leading hemp extract manufacturer based in South Carolina, RE Botanicals in 2019 acquired Palmetto Synergistic Research (dba Harmony), which was founded in 2015 by Janel Ralph, inspired to develop products to serve her special needs daughter Harmony.

“We are a small, woman-operated company,” said Ralph. “The DEA’s new rule could put us out of business overnight.”

The lawsuit claims DEA’s interim final rule is unlawful because it exceeds the DEA’s legal authority and violates the Agriculture Improvement Act of 2018, also known as the Farm Bill. 

Boulder Creek Technologies

The DEA’s rule clarifies the agency’s position that all hemp derivatives or extracts exceeding 0.3% THC shall remain Schedule I controlled substances. According to the petitioners, this requirement could be interpreted to include intermediate hemp derivatives that temporarily exceed 0.3% during processing, but contain less than 0.3% in final products. 

As such, it improperly establishes the DEA’s authority over legal hemp activities, which is contrary to the plain language and intent of the 2018 Farm Bill, the petitioners claim.

The petitioners also argue that acting DEA administrator Timothy Shea, who is individually named as a respondent along with the agency, issued the interim final rule without observing procedures required by law.

Attorneys for the petitioners include Vicente Sederberg LLP, Yetter Coleman LLP, Hoban Law Group and Kight Law Office PC.

“The DEA implemented this rule without following proper rule-making procedures, such as providing the public with notice and the opportunity to comment,” said Shawn Hauser, a partner at Vicente Sederberg and chair of the firm’s hemp and cannabinoids practice. “The petitioners believe legal action is necessary to protect the lawful U.S. hemp industry that Congress intended to establish when it enacted the 2018 Farm Bill.”

Hemp industry members, business owners and advocates are encouraged to provide comments to the DEA before the October 20, 2020 deadline. Comments can be submitted here.

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Steven Hoffman is Managing Director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and  Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.

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