[Federal Register Volume 85, Number 163 (Friday, August 21, 2020)]
[Rules and Regulations]
[Pages 51639-51645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17356]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1308 and 1312
[Docket No. DEA-500]
RIN 1117-AB53
Implementation of the Agriculture Improvement Act of 2018
AGENCY: Drug Enforcement Administration (DEA), Department of Justice.
ACTION: Interim final rule with request for comments.
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SUMMARY: The purpose of this interim final rule is to codify in the
Drug Enforcement Administration (DEA) regulations the statutory
amendments to the Controlled Substances Act (CSA) made by the
Agriculture Improvement Act of 2018 (AIA), regarding the scope of
regulatory controls over marihuana, tetrahydrocannabinols, and other
marihuana-related constituents. This interim final rule merely conforms
DEA's regulations to the statutory amendments to the CSA that have
already taken effect, and it does not add additional requirements to
the regulations.
DATES: Effective August 21, 2020. Electronic comments must be
submitted, and written comments must be postmarked, on or before
October 20, 2020. Commenters should be aware that the electronic
Federal Docket Management System will not accept comments after 11:59
p.m. Eastern Time on the last day of the comment period.
ADDRESSES: To ensure proper handling of comments, please reference
``RIN 1117-AB53/Docket No. DEA-500'' on all correspondence, including
any attachments.
[[Page 51640]]
Electronic comments: The Drug Enforcement Administration
encourages that all comments be submitted electronically through the
Federal eRulemaking Portal, which provides the ability to type short
comments directly into the comment field on the web page or attach a
file for lengthier comments. Please go to http://www.regulations.gov
and follow the online instructions at that site for submitting
comments. Upon completion of your submission, you will receive a
Comment Tracking Number for your comment. Please be aware that
submitted comments are not instantaneously available for public view on
http://www.regulations.gov. If you have received a Comment Tracking
Number, your comment has been successfully submitted, and there is no
need to resubmit the same comment.
Paper comments: Paper comments that duplicate the
electronic submission are not necessary and are discouraged. Should you
wish to mail a paper comment in lieu of an electronic comment, it
should be sent via regular or express mail to: Drug Enforcement
Administration, Attn: DEA Federal Register Representative/DPW,
Diversion Control Division; Mailing Address: 8701 Morrissette Drive,
Springfield, VA 22152.
FOR FURTHER INFORMATION CONTACT: Scott A. Brinks, Diversion Control
Division, Drug Enforcement Administration; Mailing Address: 8701
Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-
2596.
SUPPLEMENTARY INFORMATION:
Posting of Public Comments
Please note that all comments received are considered part of the
public record. They will, unless reasonable cause is given, be made
available by the Drug Enforcement Administration (DEA) for public
inspection online at http://www.regulations.gov. Such information
includes personal identifying information (such as your name, address,
etc.) voluntarily submitted by the commenter. The Freedom of
Information Act (FOIA) applies to all comments received. If you want to
submit personal identifying information (such as your name, address,
etc.) as part of your comment, but do not want it to be made publicly
available, you must include the phrase ``PERSONAL IDENTIFYING
INFORMATION'' in the first paragraph of your comment. You must also
place all of the personal identifying information you do not want made
publicly available in the first paragraph of your comment and identify
what information you want redacted.
If you want to submit confidential business information as part of
your comment, but do not want it to be made publicly available, you
must include the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the
first paragraph of your comment. You must also prominently identify the
confidential business information to be redacted within the comment.
Comments containing personal identifying information and
confidential business information identified as directed above will
generally be made publicly available in redacted form. If a comment has
so much confidential business information or personal identifying
information that it cannot be effectively redacted, all or part of that
comment may not be made publicly available. Comments posted to http://www.regulations.gov may include any personal identifying information
(such as name, address, and phone number) included in the text of your
electronic submission that is not identified as directed above as
confidential.
An electronic copy of this document and the complete Economic
Impact Analysis, to this interim final rule are available in their
entirety under the tab ``Supporting Documents'' of the public docket of
this action at http://www.regulations.gov under FDMS Docket ID: DEA-500
(RIN 1117-AB53/Docket Number DEA-500) for easy reference.
Executive Summary
The Agriculture Improvement Act of 2018, Public Law 115-334 (the
AIA), was signed into law on December 20, 2018. It provided a new
statutory definition of ``hemp'' and amended the definition of
marihuana under 21 U.S.C. 802(16) and the listing of
tetrahydrocannabinols under 21 U.S.C. 812(c). The AIA thereby amends
the regulatory controls over marihuana, tetrahydrocannabinols, and
other marihuana-related constituents in the Controlled Substances Act
(CSA).
This rulemaking makes four conforming changes to DEA's existing
regulations:
It modifies 21 CFR 1308.11(d)(31) by adding language
stating that the definition of ``Tetrahydrocannabinols'' does not
include ``any material, compound, mixture, or preparation that falls
within the definition of hemp set forth in 7 U.S.C. 1639o.''
It removes from control in schedule V under 21 CFR
1308.15(f) a ``drug product in finished dosage formulation that has
been approved by the U.S. Food and Drug Administration that contains
cannabidiol (2-[1R-3-methyl-6R-(1-methylethenyl)-2-cyclohexen-1-yl]-5-
pentyl-1,3-benzenediol) derived from cannabis and no more than 0.1% (w/
w) residual tetrahydrocannabinols.''
It also removes the import and export controls described
in 21 CFR 1312.30(b) over those same substances.
It modifies 21 CFR 1308.11(d)(58) by stating that the
definition of ``Marihuana Extract'' is limited to extracts ``containing
greater than 0.3 percent delta-9-tetrahydrocannabinol on a dry weight
basis.''
This interim final rule merely conforms DEA's regulations to the
statutory amendments to the CSA that have already taken effect, and it
does not add additional requirements to the regulations. Accordingly,
there are no additional costs resulting from these regulatory changes.
However, as discussed below, the changes reflected in this interim
final rule are expected to result in annual cost savings for affected
entities.
Changes to the Definition of Marihuana
The AIA amended the CSA's regulatory controls over marihuana by
amending its definition under the CSA. Prior to the AIA, marihuana was
defined in 21 U.S.C. 802(16) as follows:
The term ``marihuana'' means all parts of the plant Cannabis
sativa L., whether growing or not; the seeds thereof; the resin
extracted from any part of such plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of such
plant, its seeds or resin. Such term 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.
The AIA modified the foregoing definition by adding that the ``term
`marihuana' does not include hemp, as defined in section 1639o of Title
7.'' 21 U.S.C. 802(16)(B). Furthermore, the AIA added a definition of
``hemp'' to 7 U.S.C. 1639o, which reads as follows:
The term `hemp' means the plant Cannabis sativa L. and any part
of that plant, including the seeds thereof and all derivatives,
extracts, cannabinoids, isomers, acids, salts, and salts of isomers,
whether growing or not, with a delta-9 tetrahydrocannabinol
concentration of not more than 0.3 percent on a dry weight basis.
Taken together, these two changes made by the AIA limit the
definition of marihuana to only include cannabis or cannabis-derived
material that contain more than 0.3% delta-9-tetrahydrocannabinol (also
known as [Delta]\9\-THC) on a dry weight basis. Thus, to fall within
the current CSA definition of
[[Page 51641]]
marihuana, cannabis and cannabis-derived material must both fall within
the pre-AIA CSA definition of marihuana and contain more than 0.3
percent [Delta]\9\-THC on a dry weight basis. Pursuant to the AIA,
unless specifically controlled elsewhere under the CSA, any material
previously controlled under Controlled Substance Code Number 7360
(marihuana) or under Controlled Substance Code Number 7350 (marihuana
extract), that contains 0.3% or less of [Delta]\9\-THC on a dry weight
basis--i.e., ``hemp'' as that term defined under the AIA--is not
controlled. Conversely, any such material that contains greater than
0.3% of [Delta]\9\-THC on a dry weight basis remains controlled in
schedule I.
In order to meet the AIA's definition of hemp, and thus qualify for
the exception in the definition of marihuana, a cannabis-derived
product must itself contain 0.3% or less [Delta]\9\-THC on a dry weight
basis. It is not enough that a product is labeled or advertised as
``hemp.'' The U.S. Food and Drug Administration (FDA) has recently
found that many cannabis-derived products do not contain the levels of
cannabinoids that they claim to contain on their labels.\1\ Cannabis-
derived products that exceed the 0.3% [Delta]\9\-THC limit do not meet
the statutory definition of ``hemp'' and are schedule I controlled
substances, regardless of claims made to the contrary in the labeling
or advertising of the products.
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\1\ See FDA, Warning Letters and Test Results for Cannabidiol-
Related Products, https://www.fda.gov/NewsEvents/PublicHealthFocus/ucm484109.htm.
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In addition, the definition of hemp does not automatically exempt
any product derived from a hemp plant, regardless of the [Delta]\9\-THC
content of the derivative. In order to meet the definition of ``hemp,''
and thus qualify for the exemption from schedule I, the derivative must
not exceed the 0.3% [Delta]\9\-THC limit. The definition of
``marihuana'' continues to state that ``all parts of the plant Cannabis
sativa L.,'' and ``every compound, manufacture, salt, derivative,
mixture, or preparation of such plant,'' are schedule I controlled
substances unless they meet the definition of ``hemp'' (by falling
below the 0.3% [Delta]\9\-THC limit on a dry weight basis) or are from
exempt parts of the plant (such as mature stalks or non-germinating
seeds). See 21 U.S.C. 802(16) (emphasis added). As a result, a cannabis
derivative, extract, or product that exceeds the 0.3% [Delta]\9\-THC
limit is a schedule I controlled substance, even if the plant from
which it was derived contained 0.3% or less [Delta]\9\-THC on a dry
weight basis.
Finally, nothing in the AIA or in these implementing regulations
affects or alters the requirements of the Food, Drug, & Cosmetic Act
(FD&C Act). See 7 U.S.C. 1639r(c). Hemp products that fall within the
jurisdiction of the FD&C Act must comply with its requirements. FDA has
recently issued a statement regarding the agency's regulation of
products containing cannabis and cannabis-derived compounds, and DEA
refers interested parties to that statement, which can be found at
https://www.fda.gov/newsevents/Newsroom/PressAnnouncements/ucm628988.htm.
Changes to the Definition of Tetrahydrocannabinols
The AIA also modified the listing for tetrahydrocannabinols under
21 U.S.C. 812(c) by stating that the term tetrahydrocannabinols does
not include tetrahydrocannabinols in hemp. Specifically, 21 U.S.C.
812(c) Schedule I now lists as schedule I controlled substances:
``Tetrahydrocannabinols, except for tetrahydrocannabinols in hemp (as
defined under section 1639o of Title 7).''
Therefore, the AIA limits the control of tetrahydrocannabinols (for
Controlled Substance Code Number 7370). For tetrahydrocannabinols that
are naturally occurring constituents of the plant material, Cannabis
sativa L., any material that contains 0.3% or less of [Delta]\9\-THC by
dry weight is not controlled, unless specifically controlled elsewhere
under the CSA. Conversely, for tetrahydrocannabinols that are naturally
occurring constituents of Cannabis sativa L., any such material that
contains greater than 0.3% of [Delta]\9\-THC by dry weight remains a
controlled substance in schedule I.
The AIA does not impact the control status of synthetically derived
tetrahydrocannabinols (for Controlled Substance Code Number 7370)
because the statutory definition of ``hemp'' is limited to materials
that are derived from the plant Cannabis sativa L. For synthetically
derived tetrahydrocannabinols, the concentration of [Delta]\9\-THC is
not a determining factor in whether the material is a controlled
substance. All synthetically derived tetrahydrocannabinols remain
schedule I controlled substances.
This rulemaking is modifying 21 CFR 1308.11(d)(31) to reflect this
statutory change. By this rulemaking, 21 CFR 1308.11(d)(31) is being
modified via the addition of subsection (ii), which reads:
``Tetrahydrocannabinols does not include any material, compound,
mixture, or preparation that falls within the definition of hemp set
forth in 7 U.S.C. 1639o.''
Removal of Schedule V Control of FDA-Approved Products Containing
Cannabidiol
Previously DEA, pursuant to 21 CFR 1308.15, separately controlled
in Schedule V drug products in finished dosage formulations that have
been approved by FDA and that contain cannabidiol (CBD) derived from
cannabis and no more than 0.1 percent (w/w) residual
tetrahydrocannabinols (under Controlled Substance Code Number 7367).
The FDA-approved substances described under Drug Code 7367 are no
longer controlled, by virtue of the AIA. As a result, DEA is removing
the listing for ``Approved cannabidiol drugs'' under schedule V in 21
CFR 1308.15.
Note that CBD in a mixture with a [Delta]\9\-THC concentration
greater than 0.3% by dry weight is not exempted from the definition of
``marihuana'' or ``tetrahydrocannabinols.'' Accordingly, all such
mixtures exceeding the 0.3% limit remain controlled substances under
schedule I.
Removal of Import/Export Provisions Involving FDA-Approved Products
Containing CBD
Previously DEA, pursuant to 21 CFR 1312.30, required import and
export permits pursuant to 21 U.S.C. 811(d)(1), 952(b)(2), and
953(e)(3) for the import and export of drug products in finished dosage
formulations that have been approved by FDA and that contain CBD
derived from cannabis and no more than 0.1 percent (w/w) residual
tetrahydrocannabinols. Because such substances are no longer controlled
substances, DEA is likewise removing the import and export permit
requirement for these substances. The regulation is revised to delete
Sec. 1312.30(b).
Drug Code 7350 for Marihuana Extract
The current control status of marihuana-derived constituents
depends upon the concentration of [Delta]\9\-THC in the constituent.
DEA is amending the scope of substances falling within the Controlled
Substances Code Number for marihuana extract (7350) to conform to the
amended definition of marihuana in the AIA. As amended, the Drug Code
7350 definition reads:
Marihuana Extract--meaning an extract containing one or more
cannabinoids that has been derived from any plant of the genus
Cannabis, containing greater than 0.3 percent delta-9-
tetrahydrocannabinol on a dry weight
[[Page 51642]]
basis, other than the separated resin (whether crude or purified)
obtained from the plant.
21 CFR 1308.11(d)(58). The drug code 7350 became effective on January
13, 2017. 81 FR 90194.
Regulatory Analysis
Administrative Procedure Act
An agency may find good cause to exempt a rule from certain
provisions of the Administrative Procedure Act (APA) (5 U.S.C. 553),
including those requiring the publication of a prior notice of proposed
rulemaking and the pre-promulgation opportunity for public comment, if
such actions are determined to be unnecessary, impracticable, or
contrary to the public interest.
DEA finds there is good cause within the meaning of the APA to
issue these amendments as an interim final rule and to delay comment
procedures to the post-publication period, because these amendments
merely conform the implementing regulations to recent amendments to the
CSA that have already taken effect. DEA has no discretion with respect
to these amendments. This rule does no more than incorporate the
statutory amendments into DEA's regulations, and publishing a notice of
proposed rulemaking or soliciting public comment prior to publication
is unnecessary. See 5 U.S.C. 553(b)(B) (relating to notice and comment
procedures). ``[W]hen regulations merely restate the statute they
implement, notice-and-comment procedures are unnecessary.'' Gray
Panthers Advocacy Committee v. Sullivan, 936 F.2d 1284, 1291 (D.C. Cir.
1991); see also United States v. Cain, 583 F.3d 408, 420 (6th Cir.
2009) (contrasting legislative rules, which require notice-and-comment
procedures, ``with regulations that merely restate or interpret
statutory obligations,'' which do not); Komjathy v. Nat. Trans. Safety
Bd., 832 F.2d 1294, 1296 (D.C. Cir. 1987) (when a rule ``does no more
than repeat, virtually verbatim, the statutory grant of authority''
notice-and-comment procedures are not required).
In addition, because the statutory changes at issue have already
been in effect since December 20, 2018, DEA finds good cause exists to
make this rule effective immediately upon publication. See 5 U.S.C.
553(d). Therefore, DEA is issuing these amendments as an interim final
rule, effective upon publication in the Federal Register.
Although publishing a notice of proposed rulemaking and soliciting
public comment prior to publication are unnecessary in this instance
because these regulations merely implement statutory changes over which
the agency has no discretion, DEA is soliciting public comment on this
rule following its publication. For that reason, DEA is publishing this
rule as an interim final rule and is establishing a docket to receive
public comment on this rule. To the extent required by law, DEA will
consider and respond to any relevant comments received.
Executive Orders 12866 (Regulatory Planning and Review), 13563
(Improving Regulation and Regulatory Review), and 13771 (Reducing
Regulation and Controlling Regulatory Cost)
This interim final rule was developed in accordance with the
principles of Executive Orders (E.O.) 12866, 13563, and 13771. E.O.
12866 directs agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health, and safety effects;
distributive impacts; and equity). E.O. 13563 is supplemental to and
reaffirms the principles, structures, and definitions governing
regulatory review as established in E.O. 12866. E.O. 12866 classifies a
``significant regulatory action,'' requiring review by the Office of
Management and Budget (OMB), as any regulatory action that is likely to
result in a rule that may: (1) Have an annual effect on the economy of
$100 million or more or adversely affect in a material way the economy,
a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the E.O.
The economic, interagency, budgetary, legal, and policy
implications of this interim final rule have been examined and it has
been determined that it is not a significant regulatory action under
E.O. 12866 because it is a non-discretionary action that is dictated by
the statutory amendments to the CSA enacted by the AIA. While not
determined to be a significant regulatory action, this action has been
reviewed by the OMB.
As explained above, DEA is obligated to issue this interim final
rule to revise its regulations so that they are consistent with the
provisions of the CSA that were amended by the AIA. In issuing this
interim final rule, DEA has not gone beyond the statutory text enacted
by Congress. Thus, DEA would have to issue this interim final rule
regardless of the outcome of the agency's regulatory analysis.
Nonetheless, DEA conducted this analysis as discussed below.
Summary of Benefits and Costs
This analysis is limited to the provisions of the AIA that are
being directly implemented by this DEA interim final rule. DEA has
reviewed these regulatory changes and their expected costs and
benefits. Benefits, in the form of cost savings realized by DEA
registrants handling previously controlled substances, will be
generated as a direct result of the publication of this interim final
rule. DEA does not expect there to be any costs associated with the
promulgation of this interim final rule. The following is a summary; a
detailed economic analysis of the interim final rule can be found in
the rulemaking docket at http://www.regulations.gov.
The AIA's revised definitions of marihuana and
tetrahydrocannabinols effectively decontrol hemp as defined under the
AIA. DEA's regulatory authority over any plant with less than 0.3% THC
content on a dry weight basis, and any of the plant's derivatives under
the 0.3% THC content limit, is removed as a result. It is important to
note, however, that this does not mean that hemp is not under federal
regulatory oversight. The AIA directs the U.S. Department of
Agriculture (USDA) to review and approve commercial hemp production
plans developed by State, territory, and Indian tribal agencies and to
develop its own production plan. 7 U.S.C. 1639p, 1639q. Until these
regulations are finalized, State commercial hemp pilot programs
authorized under the 2014 Farm Bill are still in effect and current
participants may proceed with plans to grow hemp while new regulations
are drafted.\2\ DEA expects the USDA to assess the costs and benefits
of this new regulatory apparatus once those rules are finalized. For
these reasons, DEA considers any potential costs or benefits broadly
related to changes in the domestic industrial hemp market due to the
[[Page 51643]]
decontrol of hemp, including but not limited to the expansion in the
number of producers, consumer products, and the impact on supply chains
to be outside the scope of this analysis.
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\2\ See USDA, Hemp Production Program Questions and Answers,
https://www.ams.usda.gov/publications/content/hemp-production-program-questions-and-answers.
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To determine any cost savings resulting from this decontrol action,
DEA analyzed its registration, import, and export data. The removal of
DEA's regulatory authority over hemp as defined under the AIA will
impact only DEA registrants that currently import viable hemp seed
intended for germination. Viable hemp seed was classified as a schedule
I controlled substance prior to the amendments to the CSA enacted by
the AIA. The importation and exportation of controlled substances
requires an importer or exporter to first register with DEA, and then
apply and obtain a permit to import or export controlled substances for
each shipment.\3\ The decontrol of hemp with this interim final rule
means that viable hemp seed is no longer subject to those schedule I
requirements, as long as the material contains less than the 0.3%
limit.
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\3\ See 21 CFR 1312.11(a), 1312.21(a).
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Based on the number of import and export permits issued, DEA
estimated the number of import and export permit applications that
would no longer be needed. DEA reviewed internal data tracking the
number of imports and exports for hemp seed over a three year period
beginning January 1, 2016 and ending December 31, 2018.\4\ During this
three year period, there was an average of 88 import permits issued for
hemp seed per year, and no exports. These import permits were issued
only to participants in state commercial hemp pilot programs, including
state departments of agriculture and higher education institutions,
which are considered ``fee exempt'', and do not pay the $1,523 annual
importer registration fee.\5\ However, fee-exempt institutions are
still required to obtain a DEA registration and renew that registration
annually by filling out and submitting DEA form 225a. DEA expects these
institutions to relinquish their schedule I importer registrations as a
result of the promulgation of this interim final rule.
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\4\ DEA import data is organized by drug code. Hemp seed falls
within drug code ``7360--Marihuana''.
\5\ See 21 CFR 1301.21(a)(1).
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DEA estimates the average annual cost savings attributable to the
elimination of import permits for hemp seed, and the elimination of
annual registration renewals for hemp seed importers to be $3,225.\6\
This cost savings is realized entirely by DEA registrants. Since the
anticipated reduction in import permits and registration renewals being
processed is negligible relative to the total amount of permits and
renewals processed by DEA annually, DEA is not expected to experience a
measurable decrease in workflow or use of resources, and therefore,
will incur no cost savings. The results of this analysis are summarized
below:
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\6\ Rounded down to the nearest whole dollar.
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Average Annual Import Permit Application (DEA Form 357)
Cost Savings
Estimated hourly wage ($/hour): \7\ $45.54
Load for benefits (percent of labor rate): \8\ 43%
Loaded labor rate ($/hour): \9\ $65.06
Average hourly burden, per application: 0.25
Average annual # of import permit applications for 88
hemp seed:
Average annual hemp seed import permit application $1,431.32
labor costs: \10\
Average annual mailing cost of hemp seed import $1,579.50
permit applications: \11\
Annual Registration Renewal Application (DEA Form 225a)
Cost Savings
Estimated hourly wage ($/hour): \12\ $59.56
Load for benefits (percent of labor rate): \13\ 43%
Loaded labor rate ($/hour): \14\ $85.09
# of Importers no longer requiring registration: 21
Average hourly burden, per application: \15\ 0.12
Average annual registration renewal application $214.43
labor cost: \16\
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Total Annual Cost Savings: $3,225.25
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This interim final rule removes FDA-approved products containing
CBD from schedule V control, including controls over the importation
and exportation of this class of drugs. There is currently only one
drug that meets these criteria for decontrol.\17\ To determine any cost
savings resulting from this decontrol action, DEA analyzed its
registration, import, and export data. DEA believes all entities that
currently handle FDA-approved CBD products also handle other controlled
substances. This means the decontrol of this product will not allow
these DEA registrants to benefit from any registration-related cost
savings. However, like importers of viable hemp seed, importers and
exporters of FDA-approved CBD products will no longer be required to
obtain import and export permits from DEA.
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\7\ Median hourly wage, Bureau of Labor Statistics, Occupational
and Employment and Wages, May 2018, 11-3071 Transportation, Storage,
and Distribution Managers (http://www.bls.gov/oes/current/oes_nat.htm). The DEA considers this occupational category to be
representative of the type of employee that is likely to fill out
and submit import permits on behalf of a DEA registered importer.
\8\ Bureau of Labor Statistics, ``Employer Costs for Employee
Compensation--March 2019'' (ECEC) reports that average benefits for
private industry is 30% of total compensation. The 30% of total
compensation equates to 42.86% (30% / 70%) load on wages and
salaries.
\9\ $45.54 x (1 + 0.4286) = $65.06.
\10\ ($65.06 x 0.25) x 88 = $1,431.32.
\11\ 91% of import permits are submitted via paper form and
delivered to DEA by an express carrier with respondent-paid means
for return delivery. The estimated cost burden is $19.50 per
response: 2 x $9.75 = $19.50. $9.75 is based on a major express
carrier's national 3-day flat rate for envelopes. The DEA assumes
that 91% of import permits submitted in any given year incur this
mailing cost.
\12\ Estimates are based on the population of the regulated
industry participating in these business activities. The DEA assumes
that a general and operations manager (11-1021, 2018 Standard
Occupational Classification) will complete the form on behalf of the
applicant or registrant.
\13\ Bureau of Labor Statistics, ``Employer Costs for Employee
Compensation--March 2019'' (ECEC) reports that average benefits for
private industry is 30% of total compensation. The 30% of total
compensation equates to 42.86% (30% / 70%) load on wages and
salaries.
\14\ $59.56 x (1 + 0.4286) = $85.09.
\15\ The DEA assumes all forms are submitted online.
\16\ ($85.09 x 0.5) x 21 = $214.43.
\17\ See FDA, Regulation of Cannabis and Cannabis-Derived
Products: Questions and Answers, https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-questions-and-answers#approved.
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DEA analyzed its internal import and export data to identify the
average
[[Page 51644]]
number of permits issued for FDA-approved CBD products over a three
year period beginning January 1, 2016 and ending December 31, 2018.
During this period there was an average of 52 import permits and one
export permit issued per year, the elimination of which will result in
an average annual cost savings of $1,814.\18\ This cost savings is
realized entirely by DEA registrants. Since the anticipated reduction
in import and export permits being processed is negligible relative to
the total number of permits processed by DEA annually, DEA is not
expected to experience a measurable decrease in workflow or use of
resources, and therefore, will incur no cost savings. The results of
this analysis are summarized below:
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\18\ Rounded down to the nearest whole number.
------------------------------------------------------------------------
------------------------------------------------------------------------
Average Annual Import Permit Application (DEA Form 357)
Cost Savings
Estimated hourly wage ($/hour): \7\ $45.54
Load for benefits (percent of labor rate): \8\ 43%
Loaded labor rate ($/hour): \9\ $65.06
Average hourly burden, per application: 0.25
Average annual # of import permit applications for 52
FDA-approved CBD:
Average annual FDA-approved CBD import permit $845.74
application labor costs: \19\
Average annual mailing cost for import permit $916.50
applications: 11 20
Average Annual Export Permit Application (DEA Form 161)
Cost Savings
Estimated hourly wage ($/hour): \7\ $45.54
Load for benefits (percent of labor rate): \8\ 43%
Loaded labor rate ($/hour): \9\ $65.06
Average hourly burden, per collection: 0.5
Average annual # of export permit applications for 1
FD-approved CBD:
Average annual FDA-approved CBD export permit $32.53
application labor costs: \21\
Average annual mailing cost of export permit $19.50
applications: \11\
---------------
Total Annual Cost Savings: $1,814.27
------------------------------------------------------------------------
This interim final rule amends the definition of marihuana extract
to conform to the revised definitions of marihuana and
tetrahydrocannabinols. This revised definition now includes the 0.3%-
THC content limit for the extract, meaning hemp-derived extracts
containing less than 0.3%-THC content are also decontrolled along with
the plant itself. As discussed previously, the production of hemp and
its extracts as defined under the AIA now falls under the same
regulatory oversight shared between the States, territories, and Indian
tribal agencies, and the USDA. The FDA also affirms its regulatory
oversight over cannabis-derived compounds, such as CBD, whether or not
these compounds are ``classified as hemp under the 2018 Farm Bill.''
\22\ For these reasons, DEA considers any potential costs or benefits
broadly related to changes in the markets for domestic hemp extracts
due to their decontrol, including but not limited to the expansion in
the number of producers, consumer products, and the impact on supply
chains to be outside the scope of this analysis.
---------------------------------------------------------------------------
\19\ ($65.06 x 0.25) x 52 = $845.74.
\20\ 52 x .91 = 47 (rounded down) permits mailed per year; 47 x
$19.50 = $916.50.
\21\ ($65.06 x 0.5) x 1 = $32.53.
\22\ Ibid.
---------------------------------------------------------------------------
Like FDA-approved CBD products and viable hemp seeds, entities no
longer require a DEA registration or import and export permits to
handle hemp extract that does not exceed the statutory 0.3% THC limit.
DEA's import and export data does capture a minimal number of instances
of the importation and exportation of CBD; however, this data does not
detail whether or not the CBD was derived from Cannabis sativa L.
plants containing less than 0.3% THC content. For this reason, DEA does
not have a good basis to estimate the annual number of imported or
exported hemp-derived extracts that no longer require permits as a
result of the promulgation of this interim final rule, but after
reviewing its data, believes this number to be minimal. Therefore, DEA
concludes that this provision of the interim final rule is likely to
result in a minimal benefit to DEA registrants, but DEA does not have a
good basis to quantify this amount.
As part of its core function, DEA's Diversion Control Division is
responsible for managing over 1.8 million DEA registrations, processing
new and renewal registration applications, processing registration
modification requests, issuing certificates of registration, issuing
import and export permits, issuing renewal notifications, conducting
due diligence, maintaining and operating supporting information
systems, etc. Therefore, DEA does not anticipate it will realize any
measurable cost savings to the government as a result of the negligible
decreases in registrant services resulting from the promulgation of
this interim final rule.
As described above, DEA estimates the average annual benefit in the
form of cost savings to DEA registrants as a result of the promulgation
of this interim final rule to be $5,039.\23\ DEA calculated the present
value of this cost savings over a 20 year period at a 3 percent and 7
percent discount rate. At a 3 percent discount rate, the present value
of benefits is $74,968, while the present value of costs is $0, making
the net present value (NPV) $74,968. At a 7 percent discount rate, the
present value of benefits is $53,383, the present value of costs is $0,
making the NPV is $53,383.\24\ The table below summarizes the present
value and annualized benefit calculations.
---------------------------------------------------------------------------
\23\ The total average annual cost savings resulting from the
decontrol of viable hemp seed ($3,225) and FDA-approved CBD products
($1,814).
\24\ See Office of Mgmt. & Budget, Exec. Office of the
President, OMB Circular A-4, Regulatory Analysis (2003).
------------------------------------------------------------------------
------------------------------------------------------------------------
Discount Rate........................... 3% 7%
Annual benefit ($)...................... 5,039 5,039
Present value of benefits ($)........... 74,968 53,383
Present value of costs ($).............. 0 0
Years................................... 20 20
[[Page 51645]]
Net present value ($)................... 74,968 53,383
------------------------------------------------------------------------
Figures are rounded.
E.O. 13771 deregulatory actions are final actions that have totals
costs less than zero. Also, under E.O. 13771, regulatory actions that
expand production options, which are considered to be ``enabling
rules,'' generally qualify as E.O. 13771 deregulatory actions. This
interim final rule decontrols hemp, hemp extracts and FDA-approved
products containing CBD, and it results in cost savings to the public,
as discussed above. Accordingly, DEA has determined that this interim
final rule is an E.O. 13771 Deregulatory Action.
Executive Order 12988
This interim final rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to
eliminate ambiguity, minimize litigation, establish clear legal
standards, and reduce burdens.
Executive Order 13132
This rulemaking does not preempt or modify any provision of State
law, impose enforcement responsibilities on any State, or diminish the
power of any State to enforce its own laws. Accordingly, this
rulemaking does not have federalism implications warranting the
application of E.O. 13132.
Executive Order 13175
This interim final rule is required by statute, and will not have
tribal implications or impose substantial direct compliance costs on
Indian tribal governments.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) applies to rules that are
subject to notice and comment under section 553(b) of the
Administrative Procedure Act (5 U.S.C. 553). As explained in the
interim final rule, DEA determined that there was good cause to exempt
this interim final rule from pre-publication notice and comment.
Consequently, the RFA does not apply to this interim final rule.
Paperwork Reduction Act of 1995
This interim final rule does not involve a collection of
information within the meaning of the Paperwork Reduction Act of 1995,
44 U.S.C. 3501-21.
Unfunded Mandates Reform Act of 1995
This interim final rule will not result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $136,000,000 or more (adjusted for inflation) in any
one year, and will not significantly or uniquely affect small
governments. Therefore, no actions were deemed necessary under the
provisions of the Unfunded Mandates Reform Act of 1995. 2 U.S.C. 1532.
Congressional Review Act
This interim final rule is not a major rule as defined by the
Congressional Review Act (CRA) (5 U.S.C. 804). DEA is submitting the
required reports with a copy of this interim final rule to both Houses
of Congress and to the Comptroller General.
List of Subjects
21 CFR Part 1308
Administrative practice and procedure; Drug traffic control;
Reporting and recordkeeping requirements.
21 CFR Part 1312
Administrative practice and procedure; Drug traffic control;
Exports; Imports; Reporting and recordkeeping requirements.
For the reasons set forth above, 21 CFR parts 1308 and 1312 are
amended as follows:
PART 1308--SCHEDULES OF CONTROLLED SUBSTANCES
0
1. The authority citation for part 1308 continues to read as follows:
Authority: 21 U.S.C. 811, 812, 871(b), 956(b).
0
2. In Sec. 1308.11, paragraphs (d)(31) and (58) are revised to read as
follows:
Sec. 1308.11 Schedule I.
* * * * *
(d) * * *
(31) Tetrahydrocannabinols ......7370
(i) Meaning tetrahydrocannabinols, except as in paragraph
(d)(31)(ii) of this section, naturally contained in a plant of the
genus Cannabis (cannabis plant), as well as synthetic equivalents of
the substances contained in the cannabis plant, or in the resinous
extractives of such plant, and/or synthetic substances, derivatives,
and their isomers with similar chemical structure and pharmacological
activity to those substances contained in the plant, such as the
following:
1 cis or trans tetrahydrocannabinol, and their optical isomers
6 cis or trans tetrahydrocannabinol, and their optical isomers
3, 4 cis or trans tetrahydrocannabinol, and its optical isomers
(Since nomenclature of these substances is not internationally
standardized, compounds of these structures, regardless of numerical
designation of atomic positions covered.)
(ii) Tetrahydrocannabinols does not include any material, compound,
mixture, or preparation that falls within the definition of hemp set
forth in 7 U.S.C. 1639o.
* * * * *
(58) Marihuana Extract ......7350
Meaning an extract containing one or more cannabinoids that has
been derived from any plant of the genus Cannabis, containing greater
than 0.3% delta-9-tetrahydrocannabinol on a dry weight basis, other
than the separated resin (whether crude or purified) obtained from the
plant.
* * * * *
Sec. 1308.15 [Amended]
0
3. In Sec. 1308.15, paragraph (f) is removed.
PART 1312--IMPORTATION AND EXPORTATION OF CONTROLLED SUBSTANCES
0
4. The authority citation for part 1312 continues to read as follows:
Authority: 21 U.S.C. 821, 871(b), 952, 953, 954, 957, 958.
Sec. 1312.30 [Amended]
0
5. In Sec. 1312.30, paragraph (b) is removed and reserved.
Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-17356 Filed 8-20-20; 8:45 am]
BILLING CODE 4410-09-P