Executive Summary: All the CBD in ShiKai’s products is derived from Kentucky industrial hemp grown as part of a state-run research program created under the 2014 Agricultural Act. The products contain no THC. Our products are therefore not in violation of the Controlled Substances Act.
Industrial Hemp under the Farm Bill
The Agricultural Act of 2014, commonly called the Farm Bill, enacted a provision called Legitimacy of Hemp Research. It allows state governments to establish industrial hemp research programs through their departments of agriculture. As the United States Department of Agriculture has explained, “Section 7606 of the Agricultural Act of 2014 legalized the growing and cultivating of industrial hemp for research purposes in States where such growth and cultivation is legal under State law, notwithstanding existing Federal statutes that would otherwise criminalize such conduct.” Industrial hemp under these programs must not have THC (the primary psychoactive ingredient in marijuana) concentration in excess of 0.3 percent.
The United States Department of Justice has confirmed that industrial hemp grown as part of these state research programs is not in violation of the Controlled Substances Act. In a lawsuit with the Hemp Industries Association, the DOJ admitted on behalf of the DEA that, “where the Agricultural Act provision applies, it expressly overrides contrary provisions of the CSA [Controlled Substances Act].”
Furthermore, the Congress has also prohibited DOJ (and other federal agencies) from spending any funds to bring charges relating to industrial hemp sourced from a state research program. Specifically, the Consolidated Appropriations Act of 2016 and the Consolidated Appropriations Act of 2017 bar any federal spending “to prohibit the… transportation, sale, or use of industrial hemp that is grown or cultivated in accordance with subsection section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.”
Thus, industrial hemp grown as part of state-run research programs is not in violation of the Controlled Substances Act, and the transportation, sale, and use of such industrial hemp cannot be prosecuted by the Department of Justice.
Kentucky’s State Research Program
Several states have adopted Farm Bill-compliant research programs, including Kentucky. Under Kentucky’s research program, Kentucky’s licensed research growers “may sell [hemp] to processors in the KDA program, and processed hemp may be sold outside the [Kentucky] program. Materials eligible for sale outside the program include… extracted phytocannabinoid compounds,” such as CBD. Indeed, as the Kentucky Department of Agriculture has written, “The phytocannabinoid CBD is the primary research focus for hemp floral production in Kentucky.”
The Kentucky hemp research program has strong support among federal legislators. Senate Majority Leader Mitch McConnell has written, for example, that “Kentucky leads the country in the growth and production of industrial hemp,” and “Federal law… does not limit the ability to sell lawfully grown industrial hemp products only to states with agricultural pilot programs,” and that “importation of hemp products is legal in all fifty states.”
ShiKai Products sources the CBD in its CBD lotions and creams from a licensed processor operating as part of the Kentucky’s research program. As a result, those products are subject to the full protections of the Farm Bill and the Appropriations Act, are not in violation of the Controlled Substances Act.
[Document prepared January 15, 2018]
 Statement of Principles on Industrial Hemp, 81 Federal Register 53395 (August 12, 2015).
 Brief for Respondents at 32, Hemp Industries Ass’n v. DEA, No. 17-70162, (9th Cir. June 2, 2017).
 Consolidated Appropriations Act of 2016, Pub. L. 114-113, § 763; Consolidated Appropriations Act of 2017, Pub. L. 115-31, § 773. These protections are entirely separate from the Rohrabacher Amendment to various Appropriations Acts, which temporarily prohibit spending on federal enforcement as to medical marijuana. See United States v. McIntosh, 833 F.3d 1163, 1169-70 (9th Cir. 2016).
 Kentucky Department of Agriculture, Industrial Hemp Research Pilot Program, 2017 Policy Guide, at 1. (available at http://www.kyagr.com/marketing/documents/HEMP_Policy-Guide_2017.pdf)
 Kentucky Department of Agriculture, 2017 Kentucky Industrial Hemp Research Pilot Program Brochure at 1.
 Letter of Mitch McConnell to Thomas Vilsak, October 6, 2016, at 2 (http://www.kyagr.com/marketing/documents/HEMP_McConnell.Letter-to-Sec.Vilsack-re-Hemp.pdf).