Earlier this month, the Drug Enforcement Agency (DEA) acknowledged that cannabis seeds are in fact legal products under provisions of the 2018 Farm Bill as long as they contain less than the 0.3% THC legal threshold qualifying them as hemp. The attorney who sent the letter that sparked the review, Shane Pennington, who serves as counsel in Vicente Sederberg’s New York office, cautioned though that not much will change for the industry in the short term just because of the DEA’s letter.

“To everybody out there who is saying, ‘This is one simple trick to mail marijuana,’ please, please hear me – it is not. This is not what this is. Before you do anything consult your attorney – I would say consult your attorney and read the letter, because if the letter doesn’t say ‘You can mail it,’ I would not assume you can. I just want to be very clear about that.” – Pennington to Ganjapreneur

Pennington, who tries cannabis cases in federal court, sent the letter because it was obvious to him that the “governing principle” under the Farm Bill for distinguishing legal hemp from illegal cannabis under federal law was the 0.3% THC threshold, rather than the so-called “source rule” which dictates that anything derived from an illegal source, regardless of THC content, is illegal.

Under the source rule, seeds and clones sourced from outlawed cannabis are also considered controlled substances under federal law despite THC concentrations falling below the 0.3% threshold outlined in the Farm Bill.

Pennington said that many people in the cannabis industry argued that the source rule was the lay of the land and that the Farm Bill had no effect on the legal status of seeds and clones that could grow into THC-rich plants, prompting Pennington to ask the DEA for an official determination on the status of cannabis seeds.

“Of course, the DEA has been wrong about plenty of stuff,” Pennington said, “I sue them all the time. Nonetheless, they do speak with authority on the law and if I could get an official determination I could at least tell these people, ‘Look, we don’t have to argue anymore.’”

In the letter to Pennington, DEA Chief of the Drug & Chemical Evaluation Section Terrence L. Boos, concludes that “marihuana seed that has a delta-9-tetrahydrocannabinol concentration of not more than 0.3[%] on a dry weight basis meets the definition of ‘hemp’ and thus is not controlled” under the Controlled Substances Act – and not just seed, but “tissue culture and any other genetic material” containing less than 0.3% THC.

But, Pennington said, that letter didn’t end all arguments, which he said have evolved into claims that cannabis seeds, clones, and basically anything with less than 0.3% THC could now be mailed, brought across state lines, and shared between states that have legalized cannabis.

Nat Pennington, the founder and CEO of Humboldt Seed Company (and not related to Shane), pointed out that California’s adult-use law is very clear that seeds cannot be transferred in or out of the state regardless of current federal policies. Nat points out that in newly legal states there is often a baked-in “immaculate conception clause” which allows companies and cultivators to start growing for the program but turns a blind eye to exactly where that first batch of seed is sourced from. The DEA letter, in Nat’s view, takes some of the risk out of that first legal grow because the companies are definitely not violating the source rule by simply possessing the seeds, clones, or tissue culture as long as they don’t exceed federal THC limits for controlled substances.

While California’s rules on seeds are very strict, the rules in Oklahoma, another state where Humboldt Seed Company operates, are not.

“You don’t have to prove that they came from within the state’s system,” Nat said in an interview with Ganjapreneur. “And they also don’t keep track or want to regulate what happens to the seeds that are created within the system – they’re treated just like tomato seeds or anything else.”

Oklahoma does require all seeds in the state to be tested for invasive plants and germination rates, Nat said.

“As long as states don’t have a closed loop like California, there is more potential for seed sharing,” he said.

According to Nat, the big deal in the DEA’s response is that it likely opens the window for research and intellectual property and the ability to “follow normal seed laws.”

“There’s an opportunity to really have the states look at it differently – the industry could really benefit a lot from, for example, being able to bring cannabis seeds onto campus for genomic analysis. It’s silly to not be able to utilize that.” – Nat Pennington to Ganjapreneur

While many colleges and universities are offering cannabis-related certificates and degree programs, none of them have offerings that touch the plant (including seeds) because they receive federal funding.

In 2019, the U.S. Postal Service (USPS) did release the following guidance about mailing hemp as defined under the farm bill:

“Hemp and hemp-based products, including cannabidiol (CBD) with the tetrahydrocannabinol (THC) concentration of such hemp (or its derivatives) not exceeding a 0.3 percent limit are permitted to be mailed only when:

1. The mailer complies with all applicable federal, state, and local laws (such as the Agricultural Act of 2014 and the Agricultural Improvement Act of 2018) pertaining to hemp production, processing, distribution, and sales; and
2. The mailer retains records establishing compliance with such laws, including laboratory test results, licenses, or compliance reports, for no less than 2 years after the date of mailing.”

Shane said that the issue of whether cannabis seeds could be mailed likely needs clarification by USPS officials in light of the DEA letter.

“All that this letter says is what DEA thinks the [CSA] means at the time that they wrote that letter with respect to these particular substances,” he explained. “It’s not saying it’s legal to mail stuff under federal law or state law – it’s not saying anything about state law. … This letter doesn’t change California law on this stuff. It doesn’t change was USPS thinks are verboten cannabis products.”

The letter, Shane said, doesn’t legalize interstate commerce of clones, doesn’t change any rules on marketing or advertising, or the positions of any other federal agency.

The real significance, Shane said, is that it offers some clarification for “third-party regulators” such as the Food and Drug Administration (FDA), state regulators, law enforcement agencies, because they “take their cues” from the DEA on controlled substances policy.

“If you read opinions from state courts about trying to draw lines under state law on hemp and marijuana, they will cite DEA regs and DEA guidance,” he said. “The point is that, while it’s not immediate, over time as these regulators and lawmakers realize that DEA’s views are more flexible than they realized, it is entirely reasonable to expect that they will loosen up some of their standards as well.”

Shane explained that what will really determine how quickly and dramatically those standards change is how quickly people use the letter to lobby state lawmakers, regulators, and other agencies.