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Hemp Indus. Ass'n v. DEA - 357 F.3d 1012 (9th Cir. 2004)


A circuit court reviews federal rules and regulations under Chevron U.S.A, Inc. v. Natural Resources Defense Council, Inc. Under Chevron's two-part test, the court must decide (1) whether a statute unambiguously forbids an agency's interpretation, and, if not, (2) whether the interpretation, for other reasons, exceeds the bounds of the permissible. While at step one the court must give effect to the unambiguously expressed intent of Congress, if the statute is silent or ambiguous with respect to the specific issue, at step two the court sustains the agency's interpretation if it is based on a permissible construction of a statute. 


Appellants manufacture, distribute, or sell comestible items containing oil or sterilized seeds from hemp, a species of plant within the genus Cannabis. Their business activities include importing and distributing sterilized hemp seed and oil and cake derived from hemp seed, and manufacturing and selling food and cosmetic products made from hemp seed and oil. They petitioned for review of a DEA order, challenging the enforceability of DEA rules, DEA-206F and 21 C.F.R. § 1308.11(d)(27) as amended by DEA-205F. They challenged two DEA regulations that when taken together banned the sale or possession of items containing oil or sterilized seeds from hemp, even if they contained only non-psychoactive trace amounts of tetrahydrocannabinols (THC).


Were the DEA regulations  banning the sale or possession of items containing oil or sterilized seeds from hemp enforceable?




The court granted appellants' petition and permanently enjoined enforcement of the final rules at issue with respect to non-psychoactive hemp or products containing it. The court rejected the DEA's claim that naturally-occurring THC in those parts of the hemp plant excluded from the definition of marijuana in 21 U.S.C.S. § 802(16) of the Controlled Substances Act (CSA) have always been included under the listing for THC. The definition plainly excepted mature stalks and oil or cake made from the seeds of the hemp plant, from which appellants products were made, and the definition of THC in 21 C.F.R. § 1308.11(d)(27) included only synthetic THC. The DEA's rules attempted to add naturally-occurring THC to Schedule I without following the requirements for such an addition; hence, those rules could not be enforced with respect to THC found in parts of the plant excluded under the statute.

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