HOUSE_OVERSIGHT_024705.jpg

ACKRELL
CAPITAL
CHAPTER IV U.S. Legal Landscape

with the DEA. Any person that manufactures, distributes, dispenses or otherwise possesses a controlled
substance in violation of the CSA is subject to civil and criminal penalties.

The CSA schedules are numbered I to V. Schedule I substances are subject to the strictest controls,
and Schedule V substances are subject to the least restrictive controls. A controlled substance is listed
on a particular schedule according to four factors:

(i) The substance’s potential for abuse.
(ii) Whether the substance has a currently accepted medical use in treatment in the United
States.
(iii) Whether the substance is accepted as safe to use under medical supervision.
(iv) The degree of physical and psychological dependence that may result from abuse of the
substance.

Upon enactment in 1970, the CSA assigned each controlled substance to a specific schedule. The
U.S. Congress may legislate a controlled substance’s addition to or removal from a CSA schedule. The
CSA also provides a regulatory framework for a substance to be added to or removed from a schedule;
such change generally involves a recommendation by the U.S. Department of Health and Human
Services (DHHS) and concurrence with that recommendation by the DEA. The U.S. Food and Drug
Administration, an agency of the DHHS, is charged with making certain safety-related determinations
used in DHHS scheduling recommendations.

Schedule I controlled substances are those found by the U.S. Congress or the DEA and the DHHS
to have a high potential for abuse, to have no currently accepted medical use in treatment in the United
States and to have a lack of accepted safety for use under medical supervision. Current Schedule I sub-
stances include marijuana, THC, heroin, ecstasy, LSD and peyote. Unlike Schedule II through Sched-
ule V controlled substances, which can be prescribed by a doctor, the CSA does not allow prescriptions
to be written for Schedule I controlled substances.

Marijuana

Marijuana has been a Schedule I controlled substance since enactment of the CSA in 1970. The CSA
defines “marijuana” as

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, deriv-
ative, mixture, or preparation of such plant, its seeds or resin. Such term does not include
the mature stalks of such plant, fiber produced from such stalks, oil or cake made from
the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or
preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake,
or the sterilized seed of such plant which is incapable of germination.

The parts and derivatives of the cannabis plant that are excluded from the CSA definition of
marijuana have industrial uses and generally contain little or no THC. Non-marijuana cannabis
products—commonly known as hemp products—including rope, clothing, animal feed and soap,
are not subject to control under the CSA. The CSA does not restrict such non-marijuana products

© 2017 Ackrell Capital, LLC | Member FINRA / SIPC
69
HOUSE_OVERSIGHT_024705