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Case number 20-1376, Vamp Industries Association and R.E.

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Botanicals, Inc.

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Petitioners versus Drug Enforcement Administration and Ann Milgram, Administrator of Drug Enforcement Administration.

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Mr. Pennington for the petitioners, Ms.

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Carroll for the respondents.

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Mr. Pennington, good morning.

[00:00:21] Speaker 01:
Morning.

[00:00:23] Speaker 01:
Please proceed.

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May it please the court, Shane Pennington for Petitioners Hemp Industries Association and Ree Botanicals, Inc.

[00:00:34] Speaker 01:
Your honors, I'd like to spend the time that I have today primarily starting with standing and then moving to try to clarify what may be some confusion about the primary substantive points that petitioners challenge with respect to DEA's interim final rule.

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Beginning with standing,

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The Hemp Industries Association, I think a good place to start is with the 2004 Ninth Circuit case, Hemp Industries Association versus- Council, I'd rather you start with a specific reference to what it is about the regulation that bothers you and why it hurts you.

[00:01:13] Speaker 01:
Sure, Your Honor.

[00:01:14] Speaker 03:
Well, in all due respect, that's standing as far as I'm concerned.

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Yes, I agree.

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Right, absolutely, Your Honors.

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So if you go to the newly promulgated regulation that's at issue from the Interim Final Rule, it addresses tetrahydrocannabinols naturally contained in the plant cannabis sativa L. Those natural tetrahydrocannabinols are a substance that every hemp company inevitably handles or interacts with.

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Council, please just focus on the language and tell me why the language bothers you.

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So the language is the definition of natural tetrahydrocannabinols at 21 CFR 1308.11 D 31.

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And DEA's regulation says defines that term tetrahydrocannabinols to include tetrahydrocannabinols naturally contained in the cannabis plant.

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And the reason that that is harmful to the hemp industry and to every hemp company is because every hemp company inevitably and necessarily handles natural tetrahydrocannabinols.

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And we know that from the record because.

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Well, you know it from the record.

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I mean, if you look at the petition for review,

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You'll see that ReBotanicals and 300 some companies that are members of Hemp Industries Association are manufacturers and processors of hemp and hemp is parts or all of the cannabis plant.

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Yeah, but please focus on the language.

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You're saying the regulation differs from the statute.

[00:03:14] Speaker 01:
Yes, your honor, so.

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In other words, you're not challenging the statute.

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No, your honor.

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You're challenging the regulation, arguing the regulation is different from the statute.

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Yes.

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Where is it different and why, and why does that hurt you?

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So the statute excludes from this reference to schedule one tetrahydrocannabinols in hemp.

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The statute refers to tetrahydrocannabinols in hemp.

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As opposed to defined as hemp.

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Yes, your honor, and that difference really matters because all natural tetrahydrocannabinols occur in hemp, but not all of them meet the definition of hemp.

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And so, for example, take delta-9 tetrahydrocannabinol.

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Delta-9 tetrahydrocannabinol occurs in hemp, quite obviously.

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because that's the material that determines whether hemp falls, whether a cannabis material falls on one side of the line or other between hemp and marijuana.

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If the government were to say that we do not interpret the regulation any differently than the statute, then there'd be no controversy, would there be?

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Not with respect to that claim, Your Honor.

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That's right.

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That's the only claim you're making.

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No, Your Honor.

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The other claim that we're making is that DEA's failure to explain its change of position with respect to its obligation under 21 USC 811 D1 to subject Epidiolex to Schedule V control.

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Why is Epidiolex of any concern to you?

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because as the government explains in its brief, DEA apparently views Epidiolex as hemp, and we are the Hemp Industries Association.

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And if Epidiolex is a material that DEA views itself as compelled to subject to control under 811D1 to ensure treaty compliance, then presumably it would also view the rest of hemp as requiring the same level of control.

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If the government were to deny that, then there's still no controversy, right?

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If the government were to deny it, but in footnote 10 of the government's brief, the government doesn't deny it.

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It in fact says... We'll see what the government says about that.

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But certainly on the first point, just as my colleague Judge Rogers pointed out, there'd be no standing

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if the government did not take a different position than you with respect to the interpretation of the regulation vis-a-vis the statute.

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If the government took the position the regulation is no different than the statute, then there'd be no controversy over that issue.

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I want to agree, but there's just one problem and that's just chenry because the interim final rule is what's at issue here and the interim final rule certainly doesn't track the statute the regulation that's in the code of federal regulations.

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Is not the same as the statute and so whatever the government says in this case doesn't change the fact that when anyone, including local law enforcement regulators go to look.

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to federal law, which they do, to determine what's criminal and what's not at state law, for example.

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No, no.

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If the government were to say, we had never intended any interpretation different than the statute, they would be bound by that in the future.

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So they would be bound in the case of an enforcement action.

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Of course, we don't have to wait for an enforcement of an unlawful regulation in order to have standing to challenge.

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No, it's not.

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If the government takes a position that the language in the regulation means the same as the statute, there wouldn't be any controversy in the case at all.

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But we'll see what the government says.

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Yes, Your Honor.

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Mr. Pennington, just so I'm clear to follow up on Judge Silverman's point, the statute talks about him.

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The regulation defines hemp and concludes that only this hyperex meets the test.

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Is that your point?

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I'm not sure that I understand the question, Your Honor.

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Could you please repeat it?

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Well, I thought your argument was there's a statute

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That refers to him and authorities the government has.

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And then the agency comes along and issues a regulation which defines certain statutory terms.

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And in so defining those terms, it has in your view created this problem.

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That's right, your honor.

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All right.

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So when you read the plain text of the statute and then you look at the plain text of the regulation, your position is, regardless of what the government may say now, what it has promulgated in the interim final rule is simply either inconsistent with the statute

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or it has to revise its rule.

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In other words, your point is since the government has taken the position not only in the interim rule and confirmed it as it were in its brief for council to make a concession to us

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only goes so far in the sense that unless council tells us the commission has specifically authorized its concession, I'm not clear what it's worth.

[00:09:35] Speaker 01:
I completely agree, Your Honor.

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And if I could emphasize the court is held in, we cite this case in our brief, it's Americans for Safe Access versus DEA.

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It's a 2013 case.

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And in that case, the court recognized that when DEA puts a substance in schedule one of the Controlled Substances Act, that is a quote, inherently pejorative.

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classification that the government means an intense and knows will influence third party regulators and lawmakers, and it does, and we cited cases in our, in our brief, where that has in fact happened both before and after the farm bill and the interim final rule.

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And the point there is that this

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whatever they might say in this case, Your Honor, it has already caused us harm, reputational harm, by making this authoritative and inherently pejorative statement about a substance that we use.

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To give an example, it would be like a cake company, for example, and if DEA were to say that flour and eggs were schedule one controlled substances.

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That would, to say that the- Wait a minute, Counsel, I don't know what you're talking about.

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The whole burden of your case is that the term in hemp is somehow broader than defined as hemp.

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That's right.

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That's right, Your Honor.

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That is your whole case, right?

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And on looking at it, it doesn't look to me to be intended to be any different.

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But

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And I took from the government's brief, but there was no intention to make a difference here.

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If there is no difference, then there's no case.

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If I could explain the difference, I think you put your finger directly on, you know, the very important point with respect to this claim.

[00:11:32] Speaker 04:
And so- While you're, Mr. Pennington, while you're answering that question, would you point to the specific sentence in the rule that you think conflicts with the statute?

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The only one I can find is on the last sentence on the left-hand column in the federal register at 51-641.

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Is that what you're depending on when they say,

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a cannabis derivative extract or product that exceeds the THC limit is a Schedule 1 controlled substance, even if the plant is less than the 0.3% THC.

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Is that what you're relying on?

[00:12:12] Speaker 01:
No, Your Honor.

[00:12:14] Speaker 01:
I would point on the same page, 51641, on the third column in a section titled Removal of Schedule 5 control over FDA approved products.

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And I know that

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Well, that's not the dialect.

[00:12:28] Speaker 01:
Yes, your honor, but they give an example there that I think illustrates the point well.

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So if you'll hear me out here, it's in the last paragraph there that begins with note.

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Quote, note that CBD in a mixture with a delta 9 THC concentration greater than 0.3% by dry weight is not exempted from the definition of marijuana or tetrahydrocannabinols.

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That means that the natural tetrahydrocannabinols in hemp

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are not just marijuana.

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This example, it would be marijuana.

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And I don't dispute that.

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But the point here is that it's also natural tetrahydrocannabinols.

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according to DEA in the interim final rule.

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And that is unlawful.

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The reason, and it has consequences for this industry because the sentencing under 21 USC 841, the sentences that are applicable to tetrahydrocannabinols versus marijuana differ greatly.

[00:13:26] Speaker 02:
And- You're diverting from the key point.

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Your key language difference

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is in hemp versus defined as hemp, right?

[00:13:37] Speaker 01:
Yes, your honor.

[00:13:37] Speaker 02:
Okay.

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Now tell me why the term defined as hemp is somehow more restrictive than in hemp.

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Because- For you and having, what is the injury to you because of that difference?

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Because delta-9-tetrahydrocannabinol

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is always 100% delta 9 tetrahydrocannabinol by definition.

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But in order for that substance to be hemp under the statute, it would have to be not more than 0.3% delta 9 tetrahydrocannabinol.

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And that's impossible.

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That's impossible.

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So the effect of DEA's rule is to reimpose the 0.3% threshold on

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to the Tetrahydrocannabinol's definition, which is something that Congress did not do and couldn't have meant to do.

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Are you sure you're not challenging the statute?

[00:14:36] Speaker 01:
Yes, Your Honor, because we don't

[00:14:39] Speaker 01:
The definition of tetrahydrocannabinols in the 2018 Farm Bill was a codification of HIAVDEA2.

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In that case, the Ninth Circuit explained and held unequivocally that natural tetrahydrocannabinols are not schedule one tetrahydrocannabinols.

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And I think that may be a broader statement than the Ninth Circuit said.

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My recollection, the Ninth Circuit said that the material that came out

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parts of the plant that were not defined as marijuana could not be reached indirectly through the definition of TCH, THC.

[00:15:21] Speaker 01:
Yes, your honor.

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And natural tetrahydrocannabinols, I see that my time's up.

[00:15:27] Speaker 04:
Can I answer you?

[00:15:27] Speaker 04:
Go ahead.

[00:15:29] Speaker 01:
Thank you, your honor.

[00:15:31] Speaker 01:
HIV DEA 2, you did say the holding correctly.

[00:15:36] Speaker 01:
The point though is that every natural tetrahydrocannabinol is contained naturally in hemp.

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Therefore, by excluding tetrahydrocannabinols in hemp, Congress necessarily excluded all natural tetrahydrocannabinols.

[00:15:51] Speaker 02:
That's the point.

[00:15:52] Speaker 02:
Council, I'm still trying to forgive my colleagues who just let me ask this one question.

[00:15:58] Speaker 02:
I'm still trying to figure out

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why the language difference that you focused on has an impact on you.

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What is it that in hemp allows you to do that definition of hemp does not?

[00:16:15] Speaker 01:
The way that it affects us is that we are, by necessity, every hemp company is handling natural delta-9 tetrahydrocannabinol.

[00:16:24] Speaker 01:
And when you look at natural delta-9 tetrahydrocannabinol, everyone agrees that if it's not from an excluded part of the cannabis plant, it is marijuana.

[00:16:35] Speaker 01:
There's no dispute about that.

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But because it could be coming,

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from you're still not linking it up to the language change that you're focusing you're missing that why are you missing that what is it about the language difference that causes you a problem the language difference not not general policy what about the language

[00:16:58] Speaker 01:
The difference between tetrahydrocannabinols in hemp and tetrahydrocannabinols that meet the definition of hemp is that delta 9 would have to be 0.3% of itself in order to meet the definition of hemp, and that's impossible.

[00:17:12] Speaker 02:
Therefore... And you somehow think that the term in hemp allows you to, in the processing, go above 0.3%.

[00:17:28] Speaker 01:
There's a question whether any particular natural Delta-9 might be qualified as marijuana, but it cannot qualify as natural tetrahydrocannabinols.

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That's our point.

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And so you're correct that we do believe that in processing, if the natural Delta-9 level were to spike slightly above, you know, the 0.3% threshold somewhere in the process, which- And you think Congress intended something different from INHMP, from the definition of INHMP?

[00:17:56] Speaker 01:
Absolutely, Your Honor, or they would have said definition of hemp.

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They could have said that, that's not what they said.

[00:18:01] Speaker 02:
And they also didn't indicate any- You're getting a pretty broad meaning to the term in hemp.

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But I think I understand what you're saying.

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But in order to understand your case, you really have to read the facts of the other case to understand what it is.

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Exactly.

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Your concern is the processing of the product

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you would temporarily go over 0.3%.

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Or the residual would be perhaps over 0.3%.

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And you're worried about an enforcement proceeding against you in that event.

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Is that correct?

[00:18:45] Speaker 01:
That is one concern that we have, but even apart from that concern, if natural delta-9-tetrahydrocannabinol is a schedule 1 substance, as the IFR says it is, because it cannot meet the definition of hemp.

[00:18:58] Speaker 01:
then other third party regulators can enforce against my clients and hemp companies across the country, not because they're handling marijuana, but because according to DEA, they're handling natural tetrahydrocannabinols.

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So it poses a double layer of criminalization of something that is an essential part of this industry.

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And that is unlawful.

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We'll see when the government has a chance to respond.

[00:19:24] Speaker 01:
Thank you, Your Honor.

[00:19:24] Speaker 04:
All right, Judge Rogers, do you have any questions?

[00:19:27] Speaker 04:
Not now, thank you.

[00:19:29] Speaker 04:
All right, we'll give you a couple of minutes in reply, Mr. Pennington.

[00:19:32] Speaker 04:
Ms.

[00:19:32] Speaker 04:
Carroll, good morning.

[00:19:34] Speaker 05:
Good morning, thank you, Your Honor.

[00:19:35] Speaker 05:
May it please the court, Sarah Carroll on behalf of the government.

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As the court is aware in the Farm Bill, Congress removed substances that it defined as hemp from the CSA schedules and the rule under review merely

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does the same to DEA's list of controlled substances.

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So please come to the core issue.

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What about counsel's argument that the regulation by using the term defined as hemp is more restrictive than the term in hemp?

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True or not true?

[00:20:10] Speaker 05:
Well, the fundamental problem with that argument is that petitioners did not make it in their opening brief.

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If you look at their opening brief, they do not mention this.

[00:20:18] Speaker 02:
You're absolutely right about that.

[00:20:20] Speaker 02:
You're absolutely right.

[00:20:22] Speaker 02:
I was going to ask that question, Council.

[00:20:25] Speaker 02:
But let's assume it was implied in the opening brief.

[00:20:31] Speaker 02:
And I'm not sure, I think you may be right that they did not make the argument.

[00:20:34] Speaker 02:
But let's assume it was implied.

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What's your answer?

[00:20:40] Speaker 05:
My answer would be, I mean, it's difficult for me to give too much of an answer because we didn't have an opportunity to brief it, but my answer would be, I think as you were noting Judge Silberman, the point of this rule is simply to conform DEA's regulations to the statute.

[00:20:55] Speaker 05:
DEA was not doing anything other than what the statute does and DEA did not.

[00:21:00] Speaker 02:
In other words, your position is you're saying to the court openly, committing the agency that the regulation

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is not intended to have any different meaning than the statute.

[00:21:15] Speaker 05:
Yes, I am saying that.

[00:21:16] Speaker 05:
I think it's possible that Mr. Pennington might think that the statute means something different than potentially DEA would have thought the statute meant if it had an opportunity to brief this issue.

[00:21:29] Speaker 05:
I'm not sure.

[00:21:29] Speaker 05:
It's a little hard for me to understand their point.

[00:21:32] Speaker 05:
They seem to be saying, if you have a substance that is hemp because it's low in THC,

[00:21:38] Speaker 05:
there is still a problem because if you somehow ignored the other parts of the substance and only looked at the THC, of course, the THC would be 100% THC.

[00:21:48] Speaker 05:
And I'm just, I'm not sure I completely understand that.

[00:21:51] Speaker 05:
I also don't understand how it is relevant to them because they have submitted no evidence whatsoever of their activities or any injury.

[00:22:01] Speaker 05:
I mean, this court has made clear time and again that petitioners

[00:22:06] Speaker 05:
challenging agency action have the burden of demonstrating their standing through evidence.

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They have the same burden of production as a plaintiff moving for summary judgment in district court.

[00:22:16] Speaker 05:
But here there is no evidence whatsoever on these seemingly, I think, pretty nuanced, to say the least, distinctions that petitioners try to draw in their reply brief.

[00:22:30] Speaker 05:
But certainly they have not carried the burden of showing that

[00:22:33] Speaker 05:
there is some difference between the statute and the rule that would cause a concrete injury to them.

[00:22:39] Speaker 04:
Ms.

[00:22:40] Speaker 04:
Carroll, let's leave the Epidiolex alone and go back to the left-hand column last sentence on page 51641.

[00:22:49] Speaker 04:
Would you tell me how the agency reads that sentence as a result

[00:23:01] Speaker 04:
a cannabis derivative extract or product that exceeds the 0.3 percentage THC limit is a Schedule I controlled substance, even if the plant from which it was derived is not or is under the 0.3%.

[00:23:20] Speaker 04:
What does the agency say that that means?

[00:23:23] Speaker 04:
Forget the Epidiolex.

[00:23:27] Speaker 05:
Right.

[00:23:27] Speaker 05:
Thank you, Your Honor.

[00:23:28] Speaker 05:
So forgetting about Epidiolex, that

[00:23:31] Speaker 05:
means that in DEA's view under the statute, if someone takes a cannabis plant that itself would qualify as hemp, because it's very low in THC, but then creates some kind of derivative from that plant, and the derivative itself is higher in THC, the derivative is controlled as marijuana, even though it's from a hemp plant.

[00:23:56] Speaker 04:
All right, now let me ask you this.

[00:23:58] Speaker 04:
The only thing

[00:24:00] Speaker 04:
And this comes from the second case that exceeds the point three, is this WHM and IHM, which would have to be considered a derivative, an extract, or a product.

[00:24:15] Speaker 04:
And it's simply part of the process, isn't it, of making the hemp?

[00:24:22] Speaker 05:
That is what they say in the other case, Judge Henderson, but they are very adamant in the other case that they are not raising that claim in their challenge to the rule.

[00:24:31] Speaker 05:
They certainly could have raised that claim in the challenge to the rule.

[00:24:34] Speaker 05:
Mr. Pennington could be here right now saying that language in the rule is wrong and that matters to us because we handle IHM and WHM as they call it, and that inflicts an injury on us.

[00:24:47] Speaker 05:
And if they had raised that issue in their challenge, in their direct challenge to the rule,

[00:24:52] Speaker 05:
we would have addressed it and responded to it.

[00:24:56] Speaker 05:
But instead, in the second case, on page 60 of their opening brief in that case, they say that they think this court would lack jurisdiction to consider that argument in this case.

[00:25:08] Speaker 02:
You're confusing me referring to this case and that case.

[00:25:13] Speaker 02:
Which case?

[00:25:15] Speaker 05:
I lost you.

[00:25:17] Speaker 05:
Judge Henderson was asking about the status of

[00:25:20] Speaker 05:
intermediate and waste hemp material under the rule, and I was saying that in this case, the petition for review challenging the rule, petitioners have not raised that argument.

[00:25:32] Speaker 05:
In their second case, which is the appeal from Judge Boasberg's decision, they are very adamant that they are raising that issue there and that they are not raising it in their petition for review.

[00:25:43] Speaker 05:
And indeed, they say that's important.

[00:25:45] Speaker 02:
Yes, you're absolutely right.

[00:25:46] Speaker 02:
I just was lost between this case and that case.

[00:25:49] Speaker 05:
I'm sorry, Your Honor.

[00:25:50] Speaker 05:
Yes, that was not the most precise language.

[00:25:52] Speaker 05:
So I'm sorry for being confusing.

[00:25:55] Speaker 05:
But Judge Henderson, I think you raise an issue that petitioners could have chosen to litigate in their petition for review of the rule, whether for strategic reasons or I guess I can't say why they've chosen to litigate these cases

[00:26:11] Speaker 05:
the way that they have, but they chose not to make that argument in their petition for review.

[00:26:16] Speaker 04:
All right.

[00:26:16] Speaker 04:
Well, let me ask you then what the agency considers a derivative extract or product that would exceed the THC limit.

[00:26:29] Speaker 04:
What did you have in mind with that sentence?

[00:26:34] Speaker 05:
I think I'm not sure I can say much more than what the sentence means, but these days it's very common for companies and for different people to make, you know, oils and things that can, you know, beverages, food, all kinds of things that contain substances taken from the cannabis plant.

[00:26:58] Speaker 05:
They're not, you know, the cannabis plant itself, but it's

[00:27:01] Speaker 05:
some kind of oil or serum, or there are all kinds of different things.

[00:27:06] Speaker 05:
And DEA was saying that if a substance like that is created from a cannabis plant, but the substance itself is high in THC, the substance does not qualify as hemp and is subject to regulation under the CSA.

[00:27:22] Speaker 04:
So you're not, is the agency's reading of that sentence as excluding hemp

[00:27:33] Speaker 05:
I'm sorry, Your Honor, is the agency's reading that that excludes hemp?

[00:27:39] Speaker 04:
You're not talking about hemp in that sentence.

[00:27:43] Speaker 05:
Right.

[00:27:43] Speaker 05:
We're talking about things that are too high in THC to qualify as hemp.

[00:27:47] Speaker 05:
DEA, of course, recognizes that Congress removed hemp from CSA control.

[00:27:54] Speaker 02:
And I would like to go back to the summary of your position with respect to petitioner's main argument, which is the language of the regulation

[00:28:03] Speaker 02:
differs from the statute in a way that hurts us.

[00:28:07] Speaker 02:
And your response is number one, that argument was not made in the opening brief and therefore is forfeited before us.

[00:28:16] Speaker 02:
That's your major.

[00:28:18] Speaker 02:
And the government has never had an opportunity to respond to that specific point, which is the key point in their argument as they presented here today.

[00:28:28] Speaker 02:
Secondly, even if it was legitimately before us, you're stating unequivocally

[00:28:33] Speaker 02:
that the regulation is not to be interpreted as any different than the statute?

[00:28:42] Speaker 05:
Yes, that's right.

[00:28:43] Speaker 05:
All DEA was doing was conforming its regulations to the statute.

[00:28:47] Speaker 02:
Even though the language is slightly different.

[00:28:51] Speaker 05:
Right.

[00:28:51] Speaker 05:
Of course, this court has said time and again that an interpretive rule doesn't have to use the exact same language as a statute, and that's all that we have here.

[00:28:59] Speaker 02:
No, but okay, but you do not, there's no intention

[00:29:02] Speaker 02:
to broaden your power in the regulation vis-a-vis the statute?

[00:29:12] Speaker 05:
That's right.

[00:29:13] Speaker 05:
Again, I want to be careful because it's possible that Mr. Pennington's interpretation of the statute would be different than DEA's interpretation of the statute.

[00:29:21] Speaker 02:
So I do not want to say- Well, he's not challenging the statute.

[00:29:24] Speaker 02:
He's making very clear that he's only challenging the regulation, not the statute, and the premise of his whole position

[00:29:32] Speaker 02:
is the regulation is different from the statute and it hurts them.

[00:29:35] Speaker 02:
You make a number of points.

[00:29:36] Speaker 02:
Number one, he doesn't ever indicate why it hurts him in his opening brief, and he never even makes this argument in his opening brief.

[00:29:50] Speaker 02:
But even if it were made in his opening brief, your statement is the regulation is not, and this commits the agency, is not intended to have any different meaning

[00:30:02] Speaker 02:
than the statute?

[00:30:04] Speaker 05:
Yes, that's right, Your Honor.

[00:30:06] Speaker 02:
OK.

[00:30:09] Speaker 05:
I'm happy to answer any other questions that the court might have.

[00:30:15] Speaker 04:
Judge Rogers?

[00:30:20] Speaker 04:
Judge Rogers, do you have any questions?

[00:30:21] Speaker 03:
No, no, no.

[00:30:21] Speaker 03:
Thank you.

[00:30:22] Speaker 03:
I just thought you were saying something different.

[00:30:25] Speaker 04:
OK.

[00:30:26] Speaker 04:
And Judge Silverman?

[00:30:27] Speaker 04:
No, I'd be interested to hear a reply from

[00:30:31] Speaker 04:
All right.

[00:30:32] Speaker 04:
All right.

[00:30:32] Speaker 04:
Thank you, Ms.

[00:30:33] Speaker 04:
Carol.

[00:30:34] Speaker 04:
Thank you.

[00:30:36] Speaker 04:
Mr. Pennington, why don't you take a couple of minutes?

[00:30:39] Speaker 01:
Thank you, your honor.

[00:30:42] Speaker 01:
The government did not concede that natural tetrahydrocannabinols are not schedule one tetrahydrocannabinol.

[00:30:48] Speaker 02:
That is not the question before us.

[00:30:51] Speaker 02:
The question before us is simply, is the regulation, did you challenge in the opening brief

[00:30:59] Speaker 02:
the difference between the regulation linguistically and the statute.

[00:31:05] Speaker 02:
Council said you did not make that argument, which is you've now said today was your key argument.

[00:31:11] Speaker 02:
If you did not make it in the opening brief, how can we allow you to make it in a reply brief?

[00:31:21] Speaker 01:
I'm not I'm not incur I'm not saying that you should allow me to make an argument for the first time in the reply brief.

[00:31:27] Speaker 01:
If you look at page 46 of petitioners corrected opening brief, you'll see that there we say on their face the 2018 farm bills amendments reduce the regulatory authority we point specifically to the amendment removing half.

[00:31:41] Speaker 02:
Council, that does not say that the regulation is different from the statute, and therefore, we are hurt by the difference in the language of the regulation, which is your core argument today.

[00:31:57] Speaker 01:
But we repeatedly say that the regulation violates the statute because it purports to schedule natural tetrahydrocannabinols, which is the point.

[00:32:08] Speaker 02:
Council, it does not refer to the language.

[00:32:12] Speaker 02:
It is not a textual argument.

[00:32:15] Speaker 01:
It is, Your Honor.

[00:32:15] Speaker 02:
The Supreme Court said we're all textualist now.

[00:32:18] Speaker 01:
I should be a textualist, Your Honor.

[00:32:20] Speaker 01:
There's a difference between tetrahydrocannabinols in hemp and tetrahydrocannabinols that meet the definition of hemp.

[00:32:26] Speaker 01:
Natural tetrahydrocannabinols to meet the definition of hemp would have to be less than 0.3% of a particular natural tetrahydrocannabinol.

[00:32:34] Speaker 02:
Counselor, you did not make the argument in opening brief focusing on the difference in the language.

[00:32:39] Speaker 02:
You did not make that argument.

[00:32:41] Speaker 01:
Your honor, respectfully, I believe that we did.

[00:32:45] Speaker 01:
It is the argument.

[00:32:46] Speaker 02:
Let's assume, arguing, you made it.

[00:32:49] Speaker 02:
What do you say when the government says, wait a minute, the language may be slightly different.

[00:32:54] Speaker 02:
The government does not assert.

[00:32:58] Speaker 02:
The government asserts that the language of the regulation is exactly the same meaning as the statute.

[00:33:05] Speaker 02:
Then there's no controversy.

[00:33:07] Speaker 01:
If that's what the interim final rule said, we would agree.

[00:33:10] Speaker 02:
But the interim final rule... They interpret their own regulations.

[00:33:14] Speaker 02:
So if they say that we do not interpret this regulation any differently than the statute, then there's no controversy, right?

[00:33:23] Speaker 01:
No, Your Honor, because the CSA is a statute that this court has recognized third-party regulators rely on to understand what is criminal behavior in this country.

[00:33:33] Speaker 02:
On what, counsel, if the government says

[00:33:36] Speaker 02:
We do not interpret the regulation as giving us any broader authority than the statute.

[00:33:42] Speaker 02:
They mean the same thing.

[00:33:45] Speaker 02:
You can piece the language through and say it means the same.

[00:33:52] Speaker 02:
But when they say it means the same, you're not vulnerable.

[00:33:57] Speaker 01:
If they said that in the actual regulation, I would agree with you.

[00:34:00] Speaker 01:
The problem is that a state lawmaker or a sheriff's office is not going to go look.

[00:34:06] Speaker 02:
Well, then you'd have to take it against the sheriff.

[00:34:08] Speaker 02:
That's not before us.

[00:34:10] Speaker 01:
That's true, Your Honor.

[00:34:11] Speaker 01:
But when you can tell that the government's authoritative position is going to subject my clients to harsher criminal penalties.

[00:34:19] Speaker 02:
That is baloney.

[00:34:22] Speaker 01:
But Your Honor, respectfully, we- That is absolute baloney.

[00:34:27] Speaker 01:
Could I respond to Judge Silverman's question, Your Honor?

[00:34:31] Speaker 02:
I mean, you say it's salami rather than bologna.

[00:34:33] Speaker 02:
Yes, go ahead.

[00:34:36] Speaker 01:
We've cited cases, Your Honor, in our briefing, where federal courts have relied on DEA's purported subjection of natural tetrahydrocannabinols to Schedule I control.

[00:34:55] Speaker 01:
to subject people to harsher criminal penalties than they would have otherwise been subjected to.

[00:35:01] Speaker 01:
We pointed to 841 of 21 USC section 841, which treats marijuana and tetrahydrocannabinols very differently in terms of the penalties that are involved.

[00:35:13] Speaker 01:
There is just simply no question that by subjecting natural tetrahydrocannabinols to Schedule I controls, DEA has opened the hemp industry to harsher criminal sanctions than Congress intended them to be open to.

[00:35:26] Speaker 01:
And that is an Article III injury that should... Some sheriff in Nevada could interpret it, is that your point?

[00:35:34] Speaker 01:
Just some sheriff in Nevada, your honor, drug screening at federal government workplaces now looks for natural tetrahydrocannabinols to tell whether people can get jobs because they believe that the natural tetrahydrocannabinol.

[00:35:47] Speaker 02:
You're assuming, I give up.

[00:35:52] Speaker 04:
All right, Judge Rogers, do you have any questions?

[00:35:54] Speaker 03:
No, thank you.

[00:35:56] Speaker 04:
All right, then Madam Clerk, if you would call the next case.