A Brief (and Recent) History Of Hemp – Ashes Ashes, All Fall Down


Over thousands of years, hemp has a purported 50,000+ beneficial uses. Hemp fibers have been found in ancient burial sites, the Founding Fathers grew hemp, and the plant was utilized to pay colonial taxes. It was a global cash crop and domestically Kentucky has a deep and rich history with hemp. It’s no surprise that Senate Majority Leader Mitch McConnell, a son of the Bluegrass State, was able to steer the federal legalization of hemp in 2014, the most sweeping federal cannabis policy reform in U.S. history. I successfully argued this point in front of the 9th Circuit in 2018. Hemp moves in spooky, mysterious, and unexpected ways.

While industrial hemp was a viable cash crop in the United States in the early 1900s, the Harrison Act of 1914 and the Marijuana Tax Act of 1937 effectively combined all forms of cannabis into a federally prohibited plant/substance. The 1970s Controlled Substances Act (CSA) continued with this treatment.

The federal government has consistently defined “marihuana” to include hemp as well. While this definition recognizes the viability of hemp fibers and hemp foods, the law didn’t allow the cultivation of hemp in the United States except for a few brief periods (e.g., Hemp for Victory in the 1940s). The federal definition read that Marihuana does not include “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”

Yet Congress criminalized the resins of the plant (containing cannabinoids and the like, including THC, and the flowers). While one could not grow a lawful hemp plant in the U.S. without producing these sticky residues, the exemption did allow for the importation of hemp fibers, hemp seeds, hemp foods, etc. The exemption language set the table for a unique legal strategy that accelerated the modern-day hemp industry.

It led to the potential of cannabidiol (CBD) production, importation, and sales throughout the world’s largest legal consumer market — the United States. This was driven by the argument that if one grew a substantial amount of industrial hemp in a lawful jurisdiction, such as Asia or Europe, and if one extracted cannabinoids, such as CBD, in miniscule (by plant), yet mass (acreage) quantities, these compounds were lawful in America. As a practical matter, this reasoning worked. CBD has never been defined as a controlled substance in the U.S.

In years past, I was asked to render legal analysis and opinions to support some of the earliest importers/sellers of CBD: Cannavest (now CV Sciences), Hemp Meds, CBDRX, and others. This began in approximately 2010 with a deep dive into legislative history and I led an effort by legal scholars to mainstream the notion that industrial hemp derivatives fell within the exemptions for marijuana. I wrote various legal opinion letters and analyses on this topic, which caused my clients’ revenues to skyrocket very quickly. It caused countless other individuals to enter the CBD space, as the craze had officially begun.

The CBD boom was further inflamed by widespread, inexpensive, extraction equipment in the marketplace in states that had recently enacted marijuana laws. This liberalized the commercial production and extraction of marijuana derivatives for intrastate commerce. There were significant barriers to entry in these state-based marijuana systems, due to residency requirements, criminal history, the high cost of entry, and capital requirements. CBD represented viable commercial opportunities to those who could not, or would not, participate in the marijuana sector.

As that sector rose across the country, the CBD sector (a subdivision of hemp) began to proliferate. I was thrilled to see CBD products being sold in coffee shops, convenience stores, head shops, grocery stores, etc. I’m proud to have been the catalyst for most of that and to remain a trusted adviser, confidant, and attorney for some of the pioneering, longest-standing CBD and cannabinoid companies. That pioneering nature has brought us to the modern-day hemp industry.

MC Nutraceutical Founder/CEO, Bret Worley says that he “grew up in the hemp industry by working with CBD extraction. It was the CBD industry and those early hemp cowboys that plowed the ground for industrial hemp. They provided the opportunities that the marketplace offers today.”

Senator McConnell’s 2014 Farm Bill provided that cultivators could produce, manufacture, sell, and distribute industrial hemp biomass and derivatives for purposes of scientific-, agricultural-, and market-based research. In 2018, Congress enacted the subsequent Farm Bill, removing any previous research requirements, and making expressly clear that these compounds were not subject to the Controlled Substances Act. It also ceded authority over hemp consumables to the FDA. Five years later, the FDA has still not enacted any formal policies or rules concerning these compounds. This has led states to enact their own policies/legislation concerning hemp derivatives (such as CBD and other cannabinoids). In Colorado, for example, we first drove hemp foods policy through the Colorado Department of Public Health and Environment (CDPHE) in cooperation with CDPHE hemp program lead, Jeff Lawrence. His dedication to and leadership within this industry has been phenomenal. This policy was later enacted as the Hemp Foods Bill and adopted by the Colorado General Assembly. It treated all forms of hemp-derived cannabinoids as food ingredients or supplement ingredients and provided consumer safeguards. Colorado was the first state in this regard and became a model for the rest of the country. Other states adopted such legislation and the FDA hired some of Colorado’s pioneering individuals to advise on its policy going forward.

The 2018 Farm Bill was a significant step forward in U.S. cannabis policy reform. In August 2019, the DEA publicly affirmed that “…hemp, including hemp plants and cannabidiol (CBD) preparations at or below the 0.3 percent delta-9 THC threshold, is not a controlled substance…” On December 3, 2019, the Federal Reserve, FDIC, FinCen, and the Comptroller of Currency publicly affirmed their recognition of the same. On May 28, 2019, the USDA issued a bulletin as a legal opinion for hemp production, which stated that “[b]y amending the definition of marijuana to exclude hemp…. Congress has removed hemp from schedule I and removed it entirely from the CSA (Controlled Substances Act). In other words, hemp is no longer a controlled substance. Also, by amending schedule I to exclude THC in hemp, Congress has likewise removed THC in hemp from the CSA.” This is perhaps the most significant federal recognition that THC is no longer a controlled substance.

Between the 2014 and 2018 Farm Bills, the DEA enacted a regulatory provision (Drug Code 7350) concerning “marihuana extract,” which purported to outlaw all extracts from the cannabis plant, not just the “marihuana” plant. This included, but was not limited to, CBD. When I initially read this ruling, I immediately spoke with our client, the Hemp Industries Association. I was flabbergasted by the DEA’s untenable position.

We filed a lawsuit against the DEA on behalf of HIA. That lawsuit sought to get clarification from the court that hemp and marijuana were distinct because Drug Code 7350 did not reflect the fact that CBD or other hemp derivatives were not subject to DEA controls.

While my client did not technically obtain an injunction on this matter, the 9th Circuit Court’s ruling was extraordinarily favorable. It agreed with my analysis in determining that hemp derivatives were not within the DEA’s purview, not controlled substances, and were completely authorized by the 2014 Farm Bill. The industry grew even larger.

When the 2018 Farm Bill was enacted, we saw an unprecedented hundreds of thousands of registered acres of industrial hemp planted in the United States. Farmers took advantage of the economic opportunity, but like all emerging industries this one was subject to the boom and bust cycle. Because of FDA inaction, and because of the lack of mainstream, regulated brick-and-mortar storefronts selling these compounds, and because of the overproduction by farmers (under the mistaken belief that they would get wealthy selling hemp for cannabinoid production), and because of the nefarious system of (joker) brokers across the country purporting to transact in industrial hemp biomass and CBD, companies failed, farmers lost, and a tremendous amount of biomass was left sitting in the fields.

This caused farmers to rethink industrial hemp cultivation because many had lost everything. This brought a renewed focus to the tremendous nutritional, grain, seed, fiber, and hurd uses of the plant across the United States, but these required substantial infrastructure, which the United States did not have.

The hemp industry now birthed a divide within itself — a civil war, so to speak. Traditional hempsters who supported grain and fiber uses took a vehement stand against cannabinoid/CBD production. This divide still exists today, and colors the thinking of many in the hemp sector.

The proliferation of cannabinoid crops led to a focus on other cannabinoids, such as CBG. We also saw the proliferation of hemp-based cigarettes, with the keef added back in. We saw tremendous investment, and still do, in hemp agricultural-based support systems, such as decortication.

But the biomass remained and many states had very loose requirements to cultivate industrial hemp so cannabinoid hemp production continued. Because of all this biomass, the lack of FDA action, and good ole’ American entrepreneurialism, we saw the rise of Intoxicating Hemp Derivatives (”IHDs”).

At first, I didn’t know what to make of this. But as I saw these products being sold in mainstream outlets, accepted, and regulated by a variety of states, I recognized that this was no flash in the pan, but here to stay. The Farm Bill is set to be renewed so I don’t see a reverse in this trend. In the end, I believe IHDs will be left up to the states. More importantly, law, policy, and the judiciary have repeatedly affirmed the legality of these compounds.

“The reason that my company exists,” says Bret Worley, “and the reason that the modern-day hemp industry exists is because of the fact that these compounds are federally legal. I did not enter this space to do something that was not 100% lawful.”

Even the DEA rhetoric has changed over time. In the early days, the DEA submitted that CBD was a controlled substance, but after the HIA lawsuit, it retreated from that unsupportable position. CBD has never been a controlled substance. As set forth above, the DEA has issued public written statements indicating that it has no authority over industrial hemp.

Yet, in the fall of 2020 when the DEA reasserted itself by interim rule, another lawsuit was brought by the HIA against the DEA. Ultimately, this lawsuit failed for a variety of legal/lawyering reasons, but the DEA’s position did not really cause any setback in commercialization.

Entrepreneurs such as MC Nutraceuticals and Delta 8 THC, Delta 10 THC, HHC, and Delta 9 THC infused products and beverages have filled the marketplace. With the affirmation of federal legality surrounding Delta 9 THC (derived from hemp), we’re seeing a proliferation of lawful hemp-derived Delta 9 THC beverages sold in mainstream locations in a variety of states; this includes hospitality and event settings.

This activity is not limited to the United States, as these compounds are distributed globally. As I will discuss in Parts 3 and 4 of this series, IHDs appear to be here to stay and reflect the future of cannabis.

It’s important to note that this is no “loophole.” A loophole is defined as “an ambiguity or omission in the text through which the intent of a statute, contract or obligation may be evaded.” Congress was very intentional in selecting its words. The way to determine Congressional intent (or any legislative intent) is well settled under the rules of statutory construction. Just look at the plain language of the legislation. It states that the following downstream components of the hemp plant are legal and no longer subject to CSA controls:

all derivatives

all extracts

all cannabinoids

all isomers

all acids

all salts, and

all salts of isomers.

There is no room for debate. This topic elicits deep resentment about the “spirit” or “intent” of the 2018 Farm Bill. When I hear lawyers I have tremendous respect for saying that this was not the spirit of the legislation, or if they call it a loophole, it drives me crazy. But you ain’t gonna learn what you don’t want to know. Bottom line — Congress chose its words carefully, those words resonate today, and include IHDs, whether we like it or not.

The next part of this series will cover the hemp market and its related economics.

  • Part 3: This Ain’t No Loophole – Hemp Economics and The Market (December 6, 2023)
  • Part 4: The Law Come to Get You If You Don’t Walk Right – Hemp Policy and the Courts (December 9, 2023)
  • Part 5: I Can Tell Your Future, Whoa Just Look What’s in Your Hand – The Future Merger of Systems (December 16, 2023)



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