Cannabis Legal Report – March 2023 | Perkins Coie

[co-author: Hanna Barker Mullin]

Cannabis: In Focus

  • DEA Classifies Two Lab-Derived Cannabinoids as Schedule I
  • Washington Federal Judge Dismisses Suit Challenging Residency Requirements

DEA Classifies Two Lab-Derived Cannabinoids as Schedule I

The U.S. Drug Enforcement Administration (DEA) determined that two lab-derived cannabinoids— delta-8 THC acetate ester (delta-8 THCO) and delta-9 acetate ester (delta-9 THCO)—do not meet the federal definition of “hemp” and are therefore considered controlled substances.

Delta-8 THCO and delta-9 THCO do not naturally occur in the cannabis plant. The DEA issued its letter in response to an inquiry received from a North Carolina law firm.

Because the DEA considers delta-8 THCO and delta-9 THCO controlled substances, these substances are subject to the same federal controls applicable to marijuana, which is classified as a Schedule I substance.

The cannabis industry took note because there has been significant debate about the legality of delta-8 THC. This response solidifies that the DEA does not consider hemp-derived delta-8 THC to be a controlled substance. Of course, the U.S. Food and Drug Administration (FDA) has taken a different view when the popular, yet unregulated, cannabinoid has been added to a food or beverage.

Washington Federal Judge Dismisses Suit Challenging Residency Requirement

In an order dated February 7, 2023, a Seattle federal court dismissed a suit brought by an investor attempting to enter Washington state’s cannabis market. At issue was whether the state’s residency requirements for commercial cannabis licenses violated the U.S. Constitution. Specifically, the Dormant Commerce Clause (DCC) would ordinarily prohibit a state from placing undue burdens on out-of-state residents to favor in-state residents.

Judge Benjamin Settle ordered that the Washington residency requirements did not violate the DCC because the DCC protects a national market for goods, and there was no interstate commerce of cannabis, given its federal illegality. According to the court, even though a state may have legalized cannabis, it remains a Schedule I controlled substance at the federal level.

Last year, the U.S. Court of Appeals for the First Circuit came to the opposite conclusion. The appellate panel struck down residency requirements applicable in Maine that were similar to those applicable in Washington. The panel reasoned that Maine’s residency requirements violated the DCC and were therefore unconstitutional. Perkins Coie lawyers have written about this issue here and here. Watch this space for further developments.

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