Monson v. Drug Enforcement Admin.

Citation522 F.Supp.2d 1188
Decision Date28 November 2007
Docket NumberNo. 4:07-CR-042.,4:07-CR-042.
PartiesDavid MONSON and Wayne Hauge, Plaintiffs, v. DRUG ENFORCEMENT ADMINISTRATION and United States Department of Justice, Defendants.
CourtU.S. District Court — District of North Dakota

Joseph E. Sandler, Sandler Reiff & Young PC, Washington, DC, Timothy Q. Purdon, Vogel Law Firm, Bismarck, ND, for Plaintiffs.

David L. Peterson, U.S. Attorney's Office, Bismarck, ND, Wendy M. Ertmer, U.S. Department of Justice, Washington DC, Rick D. Johnson, Fargo, ND, for Defendants.




In this case, two North Dakota farmers seeking to cultivate industrial hemp have sought a declaration that they cannot be criminally prosecuted under the federal Controlled Substances Act, 21 U.S.C. § 801 et seq. The issue before the Court is a question of law, namely, whether the Controlled Substances Act applies to the proposed cultivation of industrial hemp pursuant to North Dakota's new state regulatory regime.

Marijuana and industrial hemp have similar characteristics but far different applications. The industrial hemp plant is of the same species of plant as marijuana — Cannabis sativa L. — but one that has been bred to a low concentration of the psychoactive element of marijuana: tetrahydrocannabinol or THC. See N.D.C.C. § 4-41-01 (limiting industrial hemp to a THC level of no more than three-tenths of one percent). THC is the compound that causes the "high" associated with the recreational use of the street drug marijuana. The stalk, fiber, sterilized seed, and oil of the industrial hemp plant, and their derivatives, are legal under federal law, and those parts of the plant are expressly excluded from the definition of "marijuana" under the Controlled Substances Act, 21 U.S.C. § 802(16). This statutory exclusion has allowed for the widespread use and trade of hemp stalk, fiber, and sterilized hemp seed and seed oil. These hemp commodities are sold throughout the world.

In 1999, the State of North Dakota enacted a law authorizing the cultivation of industrial hemp so that its farmers could supply the legal parts of the plant — stalk, fiber, seed and oil — that would otherwise have to be imported from other countries. N.D.C.C. §§ 4-41-01, 4-41-02, 4-05.1-02, 4-05.1-05, 4-09-01(21)(a), 12-60-24(2)(b), and N.D. Admin. Code, Article 7-14. The state regulatory regime provides for the licensing of farmers to cultivate industrial hemp; imposes strict THC limits precluding any possible use of the hemp as the street drug marijuana; and attempts to ensure that no part of the hemp plant will leave the farmer's property other than those parts already exempt under federal law. The plaintiffs are two North Dakota farmers who have received state licenses, have an economic need to begin cultivation of industrial hemp, and apparently stand ready to do so but are unwilling to risk federal prosecution of possession for manufacture or sale of a controlled substance. See Docket No. 13, Affidavit of David Monson, Ex. A; Affidavit of Wayne Hauge, Ex. B. The farmers seek a declaratory judgment that the Controlled Substances Act does not prohibit their cultivation of industrial hemp pursuant to their state licenses.


The Controlled Substances Act ("CSA"), 21 U.S.C. § 801 et seq., establishes a comprehensive federal scheme to regulate controlled substances. The CSA makes it unlawful to "manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense" any controlled substance, "[e]xcept as authorized by [21 U.S.C. §§ 801-904]." 21 U.S.C. § 841(a)(1). Under the CSA, "manufactur[ing]" includes "production," 21 U.S.C. § 802(15), which includes "planting, cultivation, growing, or harvesting" a controlled substance, 21 U.S.C. § 802(22). The CSA makes it a crime to possess any controlled substance except as authorized by the Act.

The CSA establishes "a `closed' system of drug distribution for legitimate handlers" of controlled substances. H.R.Rep. No. 91-1444, at 6 (1970), as reprinted in 1970 U.S.C.C.A.N, 4566, 4571-72. To effectuate that closed system, the CSA "authorizes transactions within the legitimate distribution chain' and makes all others illegal." United States v. Moore, 423 U.S. 122, 141, 96 S.Ct. 335, 46 L.Ed.2d 333 (1975) (quoting H.R.Rep. No. 91-1444 (1970)). The restrictions the CSA places on the manufacture, distribution, and possession of a controlled substance depend upon the "schedule" in which the drug has been placed. See 21 U.S.C. §§ 821-29. The CSA establishes five "schedules" of controlled substances differentiated by the scheduled drug's potential for abuse, its usefulness in medical treatment, and the potential consequences if abused. 21 U.S.C. § 812(b).

A controlled substance is listed in Schedule I, the most restrictive schedule, if it has "a high potential for abuse," "no currently accepted medical use in treatment in the United States," and "a lack of accepted safety for use ... under medical supervision." 21 U.S.C. § 812(b)(1). Under the CSA, any person who seeks to manufacture, `distribute, or possess a Schedule I controlled substance must apply for and obtain a certificate of registration from the Drug Enforcement Agency (DEA). 21 U.S.C. §§ 822-23. When evaluating an application to manufacture a Schedule I substance, the DEA is required to consider such factors as the applicant's "maintenance of effective controls against diversion," "past experience in the manufacture of controlled substances," and criminal history. 21 U.S.C. § 823(a).

Since Congress enacted the CSA in 1970, "marijuana" (or "marihuana") and tetrahydrocannabinols (THC) have been classified as Schedule I controlled substances. See Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub.L. No. 91-513, § 202, 84 Stat. 1249 (schedule I(c)(10), (17)); 21 U.S.C. § 812(c) (Schedule I(c)(10), (17)). "Marijuana" is defined under the CSA to include "all parts of the plant Cannabis sativa L." except certain components of the plant such as mature stalks, fiber produced from the stalks, sterilized seeds, and oil from the seeds. 21 U.S.C. § 802(16).

The CSA contains congressional findings regarding the effects of drug distribution and use on the public health and welfare, and the effects of drug activity on interstate commerce. Congress found that "[t]he illegal importation, manufacture, distribution, and possession and improper use of controlled substances have a substantial and detrimental effect on the health and general welfare of the American people." 21 U.S.C. § 801(2). Congress then found:

A major portion of the traffic in controlled substances flows through interstate and foreign commerce. Incidents of the traffic which are not an integral part of the interstate or foreign flow, such as manufacture, local distribution, and possession, nonetheless have a substantial and direct effect upon interstate commerce because—

(A) after manufacture, many controlled substances are transported in interstate commerce,

(B) controlled substances distributed locally usually have been transported in interstate commerce immediately before their distribution, and

(C) controlled substances possessed commonly flow through interstate commerce immediately prior to such possession.

21 U.S.C. § 801(3). Congress further found that "[l]ocal distribution and possession of controlled substances contribute to swelling the interstate traffic in such substances," 21 U.S.C. § 801(4); that "[c]ontolled substances manufactured and distributed intrastate cannot be differentiated from controlled substances manufactured and distributed interstate" and "[t]hus, it is not feasible to distinguish" between such substances "in terms of controls," 21 U.S.C. § 801(5); and that "[f]ederal control of the intrastate incidents of the traffic in controlled substances is essential to the effective control of the interstate incidents of such traffic," 21 U.S.C. § 801(6).


The plaintiffs, David Monson and Wayne Hauge, are North Dakota farmers. Compl. ¶¶ 10-11. Monson is also a member of the House of Representatives of the North Dakota Legislative Assembly. Id. at ¶ 10. In 1999, the Legislative Assembly passed a bill, introduced by Monson and others, legalizing the growth, possession, and sale of "industrial hemp" under North Dakota law. See H.R. 1428, 56th Leg. Assem. (N.D.1999); see also N.D.C.C. § 4-41-01. The statute defines "industrial hemp" as any Cannabis plant "having no more than three-tenths of one percent tetrahydrocannabinol [THC]," N.D.C.C. § 4-41-01. THC is the primary psychoactive chemical constituent of the Cannabis plant. 66 Fed.Reg. 20,038, 20,041 (Apr. 18, 2001). Contrary to the federal Controlled Substances Act, the North Dakota statute regulates Cannabis based on THC concentration.

In December 2006, the North Dakota Department of Agriculture finalized regulations governing the growth of "industrial hemp" pursuant to the new statute. See N.D. Admin. Code 7-14-01-01 to 7-14-02-09 Recognizing that "industrial hemp" is regulated under federal law as "marijuana," a Schedule I controlled substance, the Department of Agriculture regulations originally provided that any person seeking to grow "industrial hemp" must, in addition to complying with North Dakota regulations, obtain a certificate of registration from the DEA. Id. at 7-14-02-04(2), (3). However, on December 26, 2006, the Commissioner of Agriculture asked the DEA to waive the registration requirement for all farmers seeking to grow Cannabis pursuant to the new North Dakota law. See Docket No. 9, Ex. A (letter from Roger Johnson to Karen Tandy, DEA, Dec. 26, 2006). In essence, the North Dakota Commissioner of Agriculture asked the federal government to forego all regulation of marijuana that meets North Dakota's definition...

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