April 13, 2018

Appeal of the Determination on Nonmailability

NANCY SANSOUCI v. UNITED STATES POSTAL SERVICE

P.S. Docket No. MLB 18-9

APPEARANCE FOR PETITIONER:
Jennifer Sansouci

APPEARANCE FOR RESPONDENT:
Louis DiRienzo
Acting Deputy Chief Counsel
United States Postal Inspection Service

INITIAL DECISION

On January 9, 2018, Appellant timely appealed from a determination of nonmailability by the United States Postal Inspection Service (USPIS) of a package addressed to her from Wildflower Inc.  39 U.S.C. § 3001; 18 U.S.C. § 1716; 39 C.F.R. Part 953.  The Postal Service moved for summary judgment on January 23, 2018.  In a telephone conference on February 2, 2018, I declined to address the Postal Service’s pending motion and requested that the parties supplement the record with additional material to narrow the issues in dispute.  Order and Memorandum of Telephone Conference, February 2, 2018.  On March 2, 2018, the parties discussed additional information submitted, and requested that the matter be decided upon written submissions.  I ordered the parties to supplement their existing filings not later than March 16, 2018.  Order and Memorandum of Telephone Conference, March 2, 2018.  The Postal Service submitted additional materials but Appellant chose not to do so.  The record was closed on March 16, 2018.

FINDINGS OF FACT

1. Between January 3, 2018, and January 5, 2018, the United States Postal Service in Bellingham, Washington turned over to the Postal Inspection Service 45 Priority Mail parcels mailed by Wildflower Inc., Bellingham, Washington that were suspected of containing nonmailable products.¹
2. According to their online company profile, “Wildflower Inc. is a cannabis company focused on developing and designing branded cannabis products. Wildflower sells its CBD+ products online and to retailers throughout the US and also produces and markets its THC products in regulated cannabis jurisdictions.”
3. After it removed the parcels from the mail stream, USPIS personnel spoke with Steven Pearce of Wildflower Inc. and obtained his consent to open one of the parcels.  On January 3, 2018, a Postal Inspector opened a Priority Mail Parcel sent by Wildflower Inc.
4. The parcel contained a small bottle marked “Wildflower CBD+ Capsules.”
5. One of the capsules was tested for marijuana using a NIK Duquenois-Levine Reagent field test.  A positive result was obtained from this test indicating the presence of marijuana.
6. Based upon the presumptive positive field test, the 45 parcels were determined to be nonmailable, removed from the mail stream, and notices were sent to the sender and recipients.
7. One of the recipients was Appellant Nancy Sansouci.
8. On January 4, 2018, Appellant was notified by mail that the package she ordered from Wildflower Inc. had been seized by USPIS personnel on suspicion that it contained substances that are subject to the Controlled Substances Act and were nonmailable (Letter dated January 4, 2018, from United States Postal Inspection Service to Nancy Sansouci filed January 9, 2018).
9. On January 9, 2018, Appellant Nancy Sansouci filed a timely Appeal of the Determination on Nonmailability with the Judicial Officer (Letter of Appeal dated January 9, 2018).
10. Cannabidiol is a Schedule 1 controlled substance under the Controlled Substances Act (Declaration of Dr. Terrence L. Boos, ¶ 2).

DECISION

Congress enacted the Controlled Substances Act (CSA) 21 U.S.C. §§ 801–971, as a comprehensive regime to combat drug abuse and control drug traffic.  See Gonzales v. Oregon, 546 U.S. 243, 250 (2006).  The CSA divides all controlled substances into five schedules.  See 21 U.S.C. § 812(a).  Schedule 1 substances are subject to the most stringent controls.  Id. § 812(b)(1).  It is a violation of federal law to manufacture, distribute, or dispense a Schedule 1 controlled substance without a Drug Enforcement Administration (DEA) registration.  See id. §§ 822, 823, 841(a).²
Before me is the question of whether cannabidiols (CBD) are nonmailable by virtue of a classification under the CSA as a Schedule 1 controlled substance.  39 U.S.C. § 3001.  Cannabidiols are a derivative product of the marijuana plant.  Declaration of Dr. Terrence L. Boos, ¶ 2 (CBD “is a constituent of the plant Cannabis sativa L.”).  The CSA defines “marijuana” to include “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.”  21 U.S.C. § 802(16).³
Notwithstanding this federal classification, many states have legalized the manufacture and distribution of marijuana for medical purposes, and several have legalized the growth, sale, and use of marijuana for recreational purposes.⁴  “There is a serious debate in the United States over the efficacy of marijuana for medicinal uses.  Although marijuana has been legalized in a number of states, it is classified as a ‘Schedule I’ drug by the Drug Enforcement Administration, pursuant to its authority under the [CSA].”  Americans for Safe Access v. Drug Enf’t Admin., 706 F.3d 438, 439 (D.C. Cir. 2013).  The changes in the legal treatment for the sale and distribution of marijuana in many states, and the increase in use of products derived from the marijuana plant, frame this dispute, which is a case of first impression under 39 U.S.C. § 3001 and accompanying Postal Service regulations.
Although the government is steadfast regarding the current legal status of CBD, there remains much discussion about its usefulness as an herbal and/or dietary supplement among its proponents.  While that debate continues, the Postal Service must adhere to the law as it exists today.  The DEA has determined that CBD is part of the marijuana plant, and as such it remains as a Schedule 1 controlled substance, notwithstanding considerable anecdotal evidence of the usefulness of CBD as a remedy for many different ailments (Finding 10).
The question before us, however, is not whether it is wise to enforce the statute in these circumstances; rather, it is whether Congress' power to regulate interstate markets for medicinal substances encompasses the portions of those markets that are supplied with drugs produced and consumed locally. Well-settled law controls our answer. The CSA is a valid exercise of federal power, even as applied to the troubling facts of this case.
Gonzales v. Raich, 545 U.S. 1, 9 (2005)(CSA controls federal law regarding marijuana including locally cultivated marijuana for intrastate use only).
Appellant argues that Congress carved out an exception in the Appropriations Act of 2017 that permits the “transportation” (presumably including the United States mail) of industrial hemp, and that CBD falls within that exemption.
SEC. 773. None of the funds made available by this Act or any other Act may be used—
(1) in contravention of section 7606 of the Agricultural Act of 2014
(7 U.S.C. 5940); or
(2) to prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.
Appellant contends that CBD is included in the term “industrial hemp” as defined by the Act.  “The term ‘industrial hemp’ means the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”  See Pub. L. No. 113-79, 128 Stat. 649 (codified at 7 U.S.C. § 5940(b)(2)).  Assuming for argument that this definition includes the CBD at issue here, the industrial hemp from which it was derived must be “grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014.”  The Agricultural Act of 2014 defines the parameters of the growth and cultivation of industrial hemp.
(a) Notwithstanding the Controlled Substances Act (21 U.S.C. 801 et seq.), chapter 81 of Title 41, or any other Federal law, an institution of higher education (as defined in section 1001 of Title 20) or a State department of agriculture may grow or cultivate industrial hemp if--
(1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and
(2) the growing or cultivating of industrial hemp is allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.
7 U.S.C. § 5904(a).
There is no evidence in the record that the product distributed by Wildflower Inc. falls within this very narrow exception: that it be a product “grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research.”  Id.  While the law of the state in which Wildflower Inc. is incorporated may permit the cultivation of industrial hemp for non-research purposes, and while the sale of the CBD product at issue may be permitted under laws of both the state in which it was sold and the state in which the recipient resides (see note 4 supra), principles established by the Commerce Clause of the United States Constitution control here.  U.S. Const. Art. 1, § 8, cl. 3.
In Gonzales v. Raich, the Supreme Court considered the question of whether the regulation of marijuana under the CSA could apply to locally grown marijuana used solely within the state in accordance with state law.  The Supreme Court concluded that the CSA does indeed preempt the California law permitting the cultivation of marijuana for medicinal purposes.
Given the enforcement difficulties that attend distinguishing between marijuana cultivated locally and marijuana grown elsewhere, 21 U.S.C. § 801(5), and concerns about diversion into illicit channels, we have no difficulty concluding that Congress had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a gaping hole in the CSA.
Raich, 545 U.S. at 22 (footnotes omitted).  Accordingly, notwithstanding state laws that permit the cultivation of marijuana for either medical or recreational purposes, federal law applies here.
I note that contrary to Appellant’s argument, the Appropriations Act of 2017 did not exempt the growth or cultivation of industrial hemp under the CSA where it is permitted by state law, but rather it exempted from the CSA the growth or cultivation of industrial hemp by a state agricultural body or institution of higher learning for research purposes in states where cultivation of industrial hemp is permitted by law.  In other words, Congress allowed states that have already legalized the growth or cultivation of industrial hemp, to continue to do so for research purposes notwithstanding restrictions of the CSA.  The language of the Act is straightforward in this regard.  Accordingly, I find that the Appropriations Act of 2017 did not carve out an exception for CBD under the CSA that would apply in this case.⁵
Where the federal government has regulated a product and deemed it to be a Schedule 1 substance, the United States Postal Service, as a federal entity, must adhere to that determination, until either Congress, or a court of appropriate jurisdiction, determines otherwise.  See United States Postal Service, Publication 52, Hazardous, Restricted, and Perishable Mail, § 453.31 (Aug. 2017) (“If the distribution of a controlled substance is unlawful under 21 U.S.C. §§ 801–971 or any implementing regulation in 21 CFR Chapter II, then the mailing of the substance is also unlawful under 18 U.S.C. § 1716.”)  As the evidence is uncontroverted that CBD is a derivative of the marijuana plant, the finding by DEA that CBD is a Schedule 1 substance controls the Postal Service’s ability to accept the product into the United States mail under 39 U.S.C. § 3001.  Accordingly, I find that in the absence of evidence that a CBD product is being transported under the limited exception noted in 7 U.S.C. § 5904, CBD is nonmailable under current federal law.

ORDER

The Appeal is DENIED.
James G. Gilbert
Chief Administrative Law Judge