by Josh Sanderlin

With names like “Toke Back Mountain,” “Hemperor,” and “General Washington’s Secret Stash,” the beer industry is embracing cannabis, both as an ingredient and a marketing ploy. Even the large beer producers are getting involved.

 

Recently, Molson-Coors announced its new partnership with the Hydropothecary Corporation to develop a non-alcoholic, THC-infused drink for the Canadian market. Heineken released its own non-alcoholic, THC-infused “Hi-Fi Hops” through its subsidiary, Lagunitas. (The beer giant is also producing a THC vape cartridge infused with hops.)

 

In the US, the situation is murky, legally-speaking, because THC is still listed under Schedule I of the Controlled Substances Act, along with cannabis itself. But what about beverages with THC’s non-psychoactive sister cannabinoid, CBD?

by Josh Sanderlin

With names like “Toke Back Mountain,” “Hemperor,” and “General Washington’s Secret Stash,” the beer industry is embracing cannabis, both as an ingredient and a marketing ploy. Even the large beer producers are getting involved.

Recently, Molson-Coors announced its new partnership with the Hydropothecary Corporation to develop a non-alcoholic, THC-infused drink for the Canadian market. Heineken released its own non-alcoholic, THC-infused “Hi-Fi Hops” through its subsidiary, Lagunitas. (The beer giant is also producing a THC vape cartridge infused with hops.)

In the US, the situation is murky, legally-speaking, because THC is still listed under Schedule I of the Controlled Substances Act, along with cannabis itself. But what about beverages with THC’s non-psychoactive sister cannabinoid, CBD?

As an attorney, I’m frequently asked, “CBD is legal, right?” The short answer is: well, no.

In 2013, Congress attempted to legalize CBD derived from industrial hemp, a plant which is related to cannabis but produces only a miniscule amount of THC. (To be classified as industrial hemp, it cannot contain over .3 percent THC). To do so, Congress legalized the production of industrial hemp for research purposes. At the same time, they also legalized “any part of [an industrial hemp] plant.” Until last year, everyone assumed that CBD was a “part” of an industrial hemp plant, and therefore legal under federal law.

Enter the Drug Enforcement Administration (DEA). In 2016, the DEA published a new rule stating that the term “marihuana extract” means “an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis….” Because industrial hemp and THC-producing cannabis both come from the plant Cannabis sativa L., the DEA’s new definition classified all CBD as an illegal extract, regardless of whether it was derived from hemp or pot.

The hemp industry was shocked. They sued. Congress was still on their side: they submitted an amicus brief in support of the hemp industry. But the U.S. Court of Appeals for the Ninth Circuit Court tossed out the case, on largely procedural grounds. So the DEA’s rules on extracts remained in effect. CBD had become, once again, a Schedule I drug.

So how are craft beer companies releasing “CBD-infused” beer? Many are simply brewing with industrial hemp, instead of adding extracted CBD. This allows them to claim their beer has CBD — without running afoul of the DEA.

But the DEA isn’t the only regulatory body they need to worry about. Another federal agency, the Alcohol and Tobacco Tax and Trade Bureau (TTB), requires any non-standard beer ingredients to gain prior approval. And the TTB views industrial hemp as a non-standard ingredient. As the new CBD brews began to hit the market, TTB began to investigate. Those investigations resulted in several cease-and-desist letters to brewers.

Eventually, the TTB released an undated “FAQ” about brewing with hemp. The agency won’t approve any beer formulas that include the use of a Schedule I drug, it warned, and will defer to the DEA about what constitutes a Schedule I drug. (They also noted that industrial hemp is legal only for research purposes — not for commercial use.)

Much of this legal headache could dissolve in the next few weeks. Congress must pass the 2018 Farm Bill by the end of the month. This could include full legalization of industrial hemp.

If so, this could pave the way for an explosion of CBD-infused beer. The legislative language under consideration would overturn the DEA’s CBD rule. That would, in turn, remove the DEA from the TTB’s formula approval process.

But here in Washington, nothing is ever done until it’s done. In today’s hyper-partisan environment, this remains more true than ever.

But the beer industry is ready to embrace cannabinoids, and the murky legality around CBD beer could get cleared up soon. The larger legal hurdles — for US companies, at least — will involve CBD’s psychoactive sister, THC.

As an attorney, I’m frequently asked, “CBD is legal, right?” The short answer is: well, no.

 

In 2013, Congress attempted to legalize CBD derived from industrial hemp, a plant which is related to cannabis but produces only a miniscule amount of THC. (To be classified as industrial hemp, it cannot contain over .3 percent THC). To do so, Congress legalized the production of industrial hemp for research purposes. At the same time, they also legalized “any part of [an industrial hemp] plant.” Until last year, everyone assumed that CBD was a “part” of an industrial hemp plant, and therefore legal under federal law.

 

Enter the Drug Enforcement Administration (DEA). In 2016, the DEA published a new rule stating that the term “marihuana extract” means “an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis….” Because industrial hemp and THC-producing cannabis both come from the plant Cannabis sativa L., the DEA’s new definition classified all CBD as an illegal extract, regardless of whether it was derived from hemp or pot.

 

The hemp industry was shocked. They sued. Congress was still on their side: they submitted an amicus brief in support of the hemp industry. But the U.S. Court of Appeals for the Ninth Circuit Court tossed out the case, on largely procedural grounds. So the DEA’s rules on extracts remained in effect. CBD had become, once again, a Schedule I drug.

 

So how are craft beer companies releasing “CBD-infused” beer? Many are simply brewing with industrial hemp, instead of adding extracted CBD. This allows them to claim their beer has CBD — without running afoul of the DEA.

 

But the DEA isn’t the only regulatory body they need to worry about. Another federal agency, the Alcohol and Tobacco Tax and Trade Bureau (TTB), requires any non-standard beer ingredients to gain prior approval. And the TTB views industrial hemp as a non-standard ingredient. As the new CBD brews began to hit the market, TTB began to investigate. Those investigations resulted in several cease-and-desist letters to brewers.

 

Eventually, the TTB released an undated “FAQ” about brewing with hemp. The agency won’t approve any beer formulas that include the use of a Schedule I drug, it warned, and will defer to the DEA about what constitutes a Schedule I drug. (They also noted that industrial hemp is legal only for research purposes — not for commercial use.)

 

Much of this legal headache could dissolve in the next few weeks. Congress must pass the 2018 Farm Bill by the end of the month. This could include full legalization of industrial hemp.

 

If so, this could pave the way for an explosion of CBD-infused beer. The legislative language under consideration would overturn the DEA’s CBD rule. That would, in turn, remove the DEA from the TTB’s formula approval process.

 

But here in Washington, nothing is ever done until it’s done. In today’s hyper-partisan environment, this remains more true than ever.

 

But the beer industry is ready to embrace cannabinoids, and the murky legality around CBD beer could get cleared up soon. The larger legal hurdles for US companies, at least will involve CBD’s psychoactive sister, THC.

Written by
Cecelia Thorn
Cecelia has been working in the cannabis industry since 2009. She's also an award-winning journalist. In 2012, her small business became Colorado's first state-approved wholesale marijuana brokerage, which she's pretty sure made her the first official weed broker in America.

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