CBD No Longer A Schedule 1 Drug

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Aside from states embracing the movement and legalizing cannabis for recreational or medicinal purposes in the U.S., two major events marked the year. The first one was President Trump finally signing the Farm Bill that legalized the commercial cultivation of hemp nationwide. The second one was the U.S. Drug Enforcement Administration removing some of the CBD Schedule 1 status.

What does that mean for the industry? Is CBD oil a Schedule 1 substance? Let’s take a look.

Has CBD Really Been Rescheduled?

The U.S. Drug Enforcement Administration announced that drugs that contain CBD with THC content below 0.1% are not considered Schedule I drugs, as long as they have been approved by the FDA.

This was the first time the FDA has lowered any type of cannabis from Schedule 1, and it was largely a result of the approval of the first cannabis-derived medicine, a non-synthetic CBD preparation for rare types of childhood epilepsy.

While some interpret this decision as a green light to all cannabis producers to sell CBD legally, others warn that only the FDA-approved CBD-based drug is rescheduled to Schedule V of the Controlled Substances Act.

Has CBD Really Been Rescheduled?

RELATED: Industrial Hemp Legalized in Farm Bill 2018

However, if we take a closer look at the official announcement, the rescheduling seems to affect more than the CBD-based drug for epilepsy. According to the statement, the new scheduling applies to “FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1% tetrahydrocannabinols.” [1]

This basically gives space to other CBD formulations that meet the official definition to avoid the Schedule 1 status, which is CBD-based drugs that are derived from hemp and contain 0.3% THC.

As you already know, CBD is the non-intoxicating compound, while THC is what makes the user “high.”

Furthermore, the DEA stated that “the bulk cannabis material used to make the [approved drug] formulation (as opposed to the FDA-approved drug products in finished dosage form) will remain in Schedule 1.”

This means that the law didn’t fully give the freedom to make CBD from marijuana legal. Another thing is that every Schedule V drug is illegal without a prescription.

So, the reasoning behind the rescheduling is not only to make it legal for the production of the epilepsy drug, but also to put CBD into the category that has a low potential for abuse.

According to the legal classification, Schedule V drugs, substances, or chemicals are generally used for antidiarrheal, antitussive, and analgesic purposes. [2]

In addition, there are some requirements for handling FDA-approved products containing CBD. The statement reads: “As further indicated, any material, compound, mixture, or preparation other than Epidiolex that falls within the CSA definition of marijuana set forth in 21 U.S.C. 802(16), including any non-FDA-approved CBD extract that falls within such definition, remains a schedule I controlled substance under the CSA.” [1]

Furthermore, the CSA definition in 21 U.S.C. 802(16) of the term “marihuana” includes all parts of Cannabis sativa L., both growing or not, the seeds, and every compound, mixture, salt, and derivate of such plant as well as its seeds or resin. The definition excludes the mature stalks, fiber, oil, or cake made from the seeds of the cannabis plant as well as any mixture of its mature stalks. [3]

While this means that the only CBD medicine with actual medicinal function approved by the FDA is the CBD-based epilepsy drug, hemp-derived CBD got legalized with the legalization of industrial hemp with the Farm Bill.

According to the classification, marijuana is still a Schedule 1 substance, and although CBD is not scheduled itself, it is a substance derived from marijuana.

But since there is a difference between hemp and marijuana, and products that contain less than 0.3% THC and are derived from hemp are a non-issue, CBD is safe to use legally. CBD from marijuana, on the other hand, it is still prohibited on a federal level, apart from the ten states that have legalized marijuana for recreational purposes.

CBD derived from hemp is safe to use legally.

RELATED: What is CBD?

Who Benefits from This Change the Most?

There is an intriguing potential for investors after the rescheduling, and that is the so-called off-label use.

This means that physicians could prescribe the legal epilepsy drug for other conditions besides the one for which the manufacturer ran trials. If doctors give this drug to patients with other types of epilepsy, the market of the drug could be much broader.

After the news broke, CBD stocks went upside down, including the stocks of Tilray Inc.—one of the largest cannabis manufacturers.

Investors are trying to grab more CBD opportunities, so they are trying to infiltrate CBD into the beverage market successfully. It was rumored that Aurora Cannabis Inc. was in the process of negotiating with the giant Coca-Cola. Once everyone heard the rumors—which were later denied—the stocks of Aurora skyrocketed.

Although the rumors turned out not to be true, for now, Coca-Cola is closely following the development of the cannabis industry into new fields.

Who Benefits from CBD Rescheduling the Most?

RELATED: Comprehensive List of Hemp Products to Hit Shelves in 2019

Public Concerns about the Situation

Naturally, the concerns about the situation come from the cannabis community. People have expressed concern about how narrowing down the possibility of manufacturing CBD drugs by certain pharmaceuticals will make it harder for patients to obtain and—more importantly—afford the needed CBD medicine.

The FDA-approved epilepsy drug is expected to cost $32,500 per year, which—according to the CEO of GW Pharmaceuticals, the legal manufacturers—is a good number compared to other brand-name drugs for epilepsy.

Is CBD a Schedule 1 drug? The short answer is, it depends on the circumstances. CBD derived from hemp is safe and a non-issue, while cannabis-based CBD is not. So, what the DEA actually did was rescheduling only a CBD-based drug for epilepsy without listing CBD or other substances in the same group. If the DEA approves of a marijuana-derived CBD drug, then it will be rescheduled from level 1 to 5. And while some people consider this one step toward making the long-awaited improvement, others dread that the growth on the market will again take over smaller manufacturers and turn their business into a money-generating machine that doesn’t care for its customers.

Sources:

  1. https://www.federalregister.gov/documents/2018/09/28/2018-21121/schedules-of-controlled-substances-placement-in-schedule-v-of-certain-fda-approved-drugs-containing
  2. https://www.dea.gov/drug-scheduling
  3. https://www.deadiversion.usdoj.gov/schedules/marijuana/m_extract_7350.html

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