The fate of a federal rule viewed by hemp advocates as an existential threat to their emerging industry is now in the hands of a three-judge panel.

The 9th U.S. Circuit Court of Appeals in San Francisco heard oral arguments Thursday in the Hemp Industries Association’s petition challenging the U.S. Drug Enforcement Administration’s January 2017 rule creating a Controlled Substances Code Number for “marihuana extracts.”

DEA officials claim the rule is administrative in nature and helps the agency better track research and meet international drug treaty requirements.

Attorneys for a hemp industry trade association and hemp businesses argue that the DEA conflated the terms “marijuana” and “cannabis,” ultimately creating a rule that can be interpreted as scheduling cannabis and cannabinoids as illegal substances. They blame the rule for a rash of seizures of cannabidiol products.

The DEA’s rule epitomizes “government overreach” and stands in opposition to intervening legislation, Robert Hoban, a Denver-based attorney representing the hemp industry, told the 9th Circuit Court judges.

“There was a seismic shift in United States cannabis policy in 2014 with the enactment of the Farm Bill, specifically Section 7606, involving industrial hemp,” said Hoban, a principal of Hoban Law Group. “And that seems to have created some confusion, perhaps, with the Drug Enforcement Administration.”

Hoban claimed that confusion extended to other federal, state and local enforcement agencies, which have since seized products such as hemp-derived, CBD-rich extracts.

“We’ve seen this drug code utilized week after week since it’s enactment to seize, to cause criminal enforcement against lawful operators who require no DEA registration,” Hoban said.  It could be months before an opinion is released, Hoban Law Group attorneys have said.  Alicia Wallace-The Cannabist