Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 82333 

1All functions vested in the Attorney General by 

the CSA have been delegated to the Administrator 

of DEA. 28 CFR 0.100(b). 

2This document uses both the CSA spelling 

‘‘marihuana’’ and the modern spelling ‘‘marijuana’’ 

interchangeably. 

3As defined in Section 802(16). 

SUPPLEMENTARY INFORMATION: 

I. Background 

We are announcing the availability of 

a guidance for industry entitled ‘‘The 

Use of an Alternate Name for Potassium 

Chloride in Food Labeling.’’ We are 

issuing this guidance consistent with 

our good guidance practices regulation 

(21 CFR 10.115). The guidance 

represents the current thinking of FDA 

on this topic. It does not establish any 

rights for any person and is not binding 

on FDA or the public. You can use an 

alternative approach if it satisfies the 

requirements of the applicable statutes 

and regulations. 

In the Federal Register of May 20, 

2019 (84 FR 22749), we made available 

a draft guidance for industry entitled 

‘‘The Use of an Alternate Name for 

Potassium Chloride in Food Labeling’’ 

(‘‘draft guidance’’), which was intended 

to explain to food manufacturers our 

intent to exercise enforcement 

discretion for the declaration of the 

name ‘‘potassium chloride salt’’ in the 

ingredient statement on food labels as 

an alternative to the common or usual 

name ‘‘potassium chloride.’’ The draft 

guidance considered, in part, a NuTek 

Food Science citizen petition requesting 

that we issue guidance recognizing 

‘‘potassium salt’’ as an additional 

common or usual name for potassium 

chloride (see Citizen Petition from 

NuTek Food Science, LLC, dated June 

27, 2016, FDA–2016–P–1826–0001 at 

page 1). Additionally, we specifically 

invited comment on how the use of the 

name ‘‘potassium chloride salt’’ in the 

ingredient statement as an alternative to 

‘‘potassium chloride’’ would improve 

consumer understanding of the 

ingredient and what alternate names to 

‘‘potassium chloride salt’’ would better 

promote consumer understanding of 

potassium chloride (84 FR 22749 at 

22750 through 22751). We gave 

interested parties until July 19, 2019, to 

submit comments for us to consider 

before beginning work on the final 

version of the guidance. 

In response to requests for more time 

to comment on the draft guidance, we 

issued a notice in the Federal Register 

of July 10, 2019 (84 FR 32848) extending 

the comment period to September 17, 

2019. We received more than 70 

comments on the draft guidance. Many 

comments expressed concerns that 

declaration of the alternate name 

‘‘potassium chloride salt’’ would be 

confusing or would not achieve the 

public health goal of reduced sodium 

consumption, as food manufacturers 

would likely not use the alternate name. 

Food manufacturers, public health and 

consumer advocacy groups provided 

comments and data supporting 

‘‘potassium salt’’ as an alternate name to 

‘‘potassium chloride.’’ 

After careful review and 

consideration of the comments to the 

draft guidance, some of which led us to 

further review of relevant published 

literature, we have modified the final 

guidance. Changes to the guidance 

include: 

• Exercising enforcement discretion 

for declaration of ‘‘potassium salt,’’ 

rather than ‘‘potassium chloride salt,’’ in 

the ingredient statement on food labels 

as an alternative to declaration of the 

common or usual name ‘‘potassium 

chloride;’’ and 

• Further explaining potassium 

chloride’s technical role as a partial 

substitute for sodium chloride in food 

manufacturing through the inclusion of 

additional examples and references. 

As discussed in the final guidance, we 

have made these changes with the 

following considerations in mind: 

Potential public health benefits to the 

U.S. population from reduced sodium 

and increased potassium intake, the 

recognition that potassium chloride can 

substitute for sodium chloride in a 

variety of food manufacturing 

applications across a number of food 

categories, and the unlikelihood that the 

alternate name will mislead consumers. 

The guidance announced in this 

notice finalizes the draft guidance dated 

May 2019. 

II. Paperwork Reduction Act of 1995 

While this guidance contains no 

collection of information, it does refer to 

previously approved FDA collections of 

information. Therefore, clearance by the 

Office of Management and Budget 

(OMB) under the Paperwork Reduction 

Act of 1995 (PRA) (44 U.S.C. 3501– 

3521) is not required for this guidance. 

The previously approved collections of 

information are subject to review by 

OMB under the PRA. The collections of 

information in 21 CFR part 101 have 

been approved under OMB control 

number 0910–0381. 

III. Electronic Access 

Persons with access to the internet 

may obtain the guidance at either 

https://www.fda.gov/FoodGuidances or 

https://www.regulations.gov. Use the 

FDA website listed in the previous 

sentence to find the most current 

version of the guidance. 

Dated: December 11, 2020. 

Lauren K. Roth, 

Acting Principal Associate Commissioner for 

Policy. 

[FR Doc. 2020–27750 Filed 12–17–20; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

21 CFR Parts 1301 and 1318 

[Docket No. DEA–506] 

RIN 1117–AB54 

Controls To Enhance the Cultivation of 

Marihuana for Research in the United 

States 

AGENCY: Drug Enforcement 

Administration, Department of Justice. 

ACTION: Final rule. 

SUMMARY: The Drug Enforcement 

Administration (DEA) is amending its 

regulations to facilitate the cultivation 

of marihuana for research purposes and 

other licit purposes to enhance 

compliance with the Controlled 

Substances Act, including registering 

cultivators consistent with treaty 

obligations. This final rule adopts, with 

minor modifications, the notice of 

proposed rulemaking published on 

March 23, 2020, including regulations 

that govern applications by persons 

seeking to become registered with DEA 

to grow marihuana as bulk 

manufacturers, and regulations related 

to the purchase and sale of this 

marihuana by DEA. 

DATES: This final rule is effective 

January 19, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Scott A. Brinks, Regulatory Drafting and 

Policy Support Section (DPW), 

Diversion Control Division, Drug 

Enforcement Administration; Mailing 

Address: 8701 Morrissette Drive, 

Springfield, Virginia 22152–2639; 

Telephone: (571) 362–3261. 

SUPPLEMENTARY INFORMATION: 

Legal Authority and Background 

The Controlled Substances Act (CSA) 

requires all persons who seek to 

manufacture a controlled substance to 

obtain a DEA registration.1 21 U.S.C. 

822(a)(1). The CSA defines 

‘‘manufacture’’ to include the 

‘‘production’’ of a controlled substance, 

which in turn includes, among other 

things, the planting, cultivation, 

growing, or harvesting of a controlled 

substance. 21 U.S.C. 802(15), (22). Thus, 

any person who seeks to plant, 

cultivate, grow, or harvest marihuana 2 3


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82334 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 

4Section 823(a) provides that the registrations to 

manufacture controlled substances in schedule I or 

II must be ‘‘consistent with the public interest and 

with United States obligations under international 

treaties, conventions, or protocols in effect on May 

1, 1971.’’ The Single Convention entered into force 

for the United States on June 24, 1967. See Single 

Convention, 18 U.S.T. 1407. 

5That opinion is available at http://

www.justice.gov/olc/opinion/licensing-marijuanacultivation-compliance-single-convention-narcoticdrugs. 

to supply researchers or for other uses 

permissible under the CSA (such as 

product development) must obtain a 

DEA manufacturing registration. 

Because marihuana is a schedule I 

controlled substance, applications by 

persons seeking to become registered to 

manufacture marihuana are governed by 

21 U.S.C. 823(a). See generally 76 FR 

51403 (2011); 74 FR 2101 (2009), pet. for 

rev. denied, Craker v. DEA, 714 F.3d 17 

(1st Cir. 2013). DEA’s Administrator has 

the authority to grant a registration 

under section 823(a). To do so, the 

Administrator must determine that two 

conditions are satisfied: (1) The 

registration is consistent with the public 

interest (based on the enumerated 

factors in section 823(a)), and (2) the 

registration is consistent with U.S. 

obligations under the Single Convention 

on Narcotic Drugs, 1961 (‘‘Single 

Convention’’ or ‘‘Treaty’’), 18 U.S.T. 

1407.4

In 2016, DEA issued a policy 

statement aimed at expanding the 

number of manufacturers who could 

produce marihuana for research 

purposes. See Applications to Become 

Registered under the Controlled 

Substances Act to Manufacture 

Marijuana to Supply Researchers in the 

United States, 81 FR 53846 (Aug. 12, 

2016). Subsequently, the Department of 

Justice (DOJ) undertook a review of the 

CSA, including the requirement of 

section 823(a) that a registration to bulk 

manufacture a schedule I or II 

controlled substance must be consistent 

with United States obligations under 

international treaties such as the Single 

Convention, and determined that certain 

changes to its 2016 policy were needed. 

As part of this review, in June 2018, the 

DOJ Office of Legal Counsel (OLC) 

prepared an opinion (‘‘OLC Opinion’’), 

now publicly available, examining 

DEA’s policies and practices for 

granting bulk manufacturing 

registrations to marihuana growers in 

light of the CSA’s requirement that DEA 

register manufacturers of schedule I and 

II controlled substances in a manner 

consistent with the Single Convention.5

This rule is being implemented 

pursuant to the Administrator’s 

authority under the CSA ‘‘to promulgate 

rules and regulations and to charge 

reasonable fees relating to the 

registration and control of the 

manufacture, distribution, and 

dispensing of controlled substances,’’ 21 

U.S.C. 821, and to ‘‘promulgate and 

enforce any rules, regulations, and 

procedures which he may deem 

necessary and appropriate for the 

efficient execution of his functions 

under [the CSA],’’ 21 U.S.C. 871(b). 

Summary of the Notice of Proposed 

Rulemaking 

On March 23, 2020, DEA published a 

notice of proposed rulemaking (NPRM) 

in the Federal Register to (1) facilitate 

the cultivation of marihuana for 

research and licit purposes in 

compliance with the CSA, including a 

provision requiring consistency with the 

Single Convention; (2) amend DEA 

regulations pertaining to applications by 

persons seeking to become registered 

with DEA to grow marihuana as bulk 

manufacturers; and (3) establish 

regulations related to the purchase and 

sale of this marihuana by DEA. 85 FR 

16292. This final rule responds to 

comments received concerning the 

proposed rule, and DEA is adopting the 

proposed rule with minor modifications 

to the regulations to be codified at 21 

CFR 1318.04, as described below. 

Discussion of Public Comments 

DEA received comments from the 

general public, DEA registrants, 

applicants for registration to 

manufacture marijuana, organizations, 

associations, and a United States 

Senator. Some commenters expressed 

general support of the proposed rule 

because it will increase the number of 

DEA-registered bulk manufacturers of 

marihuana for research. Some 

commenters expressed general concern 

about the impact of the proposed rule. 

Other commenters expressed specific 

concerns about, among other things, the 

application process and applicant 

criteria, quality of marihuana produced, 

DEA’s ability and authority to lead the 

program, controls for the purchase and 

sale of marihuana, harvest time, quota, 

and costs. Other commenters submitted 

comments that are outside of the scope 

of this rule. 

Application Process and Criteria 

Commenters expressed concerns 

about the application process and the 

criteria for applicants. The following 

issues raised by the commenters, and 

DEA’s response to each, fall under this 

category. 

Issue 1: Many commenters stated that 

the approval process for applications 

takes too long and needs to be 

streamlined, suggesting that a timeframe 

for the approval or denial of 

applications should be determined, 

specifically within 30 days, 90 days, or 

six months of receipt of the application. 

Response 1: DEA has a process for 

receiving, reviewing, and acting on 

applications for a DEA registration or reregistration, as described in 21 CFR part 

1301. The process involves applicants 

submitting applications online or on 

paper and DEA evaluating all 

applications and supporting 

documentation submitted in accordance 

with the factors specified in 21 U.S.C. 

823. The length of this process varies 

due to the detailed review performed by 

DEA, and as explained in the NPRM, a 

review of pending applications to 

manufacture marihuana has been 

delayed due to the need to establish the 

additional policies reflected in this rule. 

After receiving an application, DEA will 

send a questionnaire to the applicant to 

be completed and returned to DEA 

within 10 business days. DEA uses the 

information from the questionnaire and 

the application to determine whether 

the application should be granted under 

the factors specified in 21 U.S.C. 823. 

After the completed questionnaire is 

processed, DEA publishes a notice of 

application in the Federal Register, and 

current registrants and applicants for 

bulk manufacture of the same class of 

substance have 60 days to comment on, 

or object to, the application, as required 

by 21 CFR 1301.33. During the 

application process, DEA investigators 

also complete site visits and submit the 

appropriate reports to aid in the 

determination of whether to grant a 

registration. Because the process of 

evaluating an application to 

manufacture a schedule I controlled 

substance includes a 60-day public 

comment period, DEA cannot act on the 

application in a shorter timeframe, such 

as 30 days. Likewise, DEA must balance 

limited resources to conduct preregistration vetting of numerous 

applicants, which impacts the length of 

time needed to complete the application 

process. As a result, DEA declines to 

adopt a specific approval date 

applicable to all applications for 

registration to bulk manufacture 

marihuana. 

However, in accordance with 21 

U.S.C. 823(i), for applications to 

manufacture a schedule I or II 

controlled substance for use only in a 

clinical trial, DEA will issue a notice of 

application not later than 90 days after 

the application is accepted for filing. 

Additionally, DEA will register the 

applicant, or serve an order to show 

cause upon the applicant in accordance 

with 21 U.S.C. 824(c), not later than 90 

days after the date on which the period 


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Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 82335 

6Applications to Become Registered under the 

Controlled Substances Act to Manufacture 

Marijuana to Supply Researchers in the United 

States,’’ 81 FR 53846 (Aug. 12, 2016). 

7The Attorney General determined that 

adjustments were necessary after receiving the 

aforementioned advisory OLC Opinion. 

for comment pursuant to such notice 

ends, unless DEA has granted a hearing 

on the application under 21 U.S.C. 

958(i). An applicant that believes it 

qualifies for review under these 

procedures should identify itself as an 

823(i) applicant in its initial application 

for registration submitted to DEA. DEA 

will then determine whether the 

applicant qualifies for the review 

timeline specified under section 823(i). 

Issue 2: Some commenters suggested 

that when there is a denial, DEA should 

provide notice and allow a hearing. 

Response 2: Pursuant to 21 U.S.C. 

824(c) and 21 CFR 1301.37, when DEA 

proposes to deny an application, DEA 

must serve the applicant with an order 

to show cause setting forth the factual 

and legal basis for the proposed denial. 

The applicant may file a request for a 

hearing, in accordance with 21 CFR 

1301.43. If a hearing is requested, DEA 

will hold the hearing in accordance 

with the provisions for formal 

adjudications set forth in the 

Administrative Procedure Act and DEA 

regulation found at 21 CFR 1316 subpart 

D. 

Issue 3: Another commenter stated 

that DEA used an internal memorandum 

to delay approval of applications to bulk 

manufacture marihuana. 

Response 3: As mentioned in the 

NPRM, after the 2016 marihuana grower 

policy statement issued by DEA,6 DOJ 

reviewed DEA’s policies and practices 

for issuing bulk marihuana 

manufacturing registrations in light of 

the CSA and determined that DEA 

needed to amend its policies.7 DEA has 

acted as expeditiously as possible to 

amend its policies to ensure consistency 

with the Single Convention as required 

by the CSA, while increasing the 

number of marihuana growers for 

research purposes. DOJ and DEA fully 

support research into the effects of 

marihuana and the potential medical 

utility of its chemical constituents, and 

DEA is working to expand the number 

of DEA-registered bulk manufacturers of 

marijuana, including through the 

finalization of this rule. 

Issue 4: One commenter requested 

that DEA make the revised Form 225 

and updated questionnaire available 

online for applicants. 

Response 4: As required by the 

Paperwork Reduction Act (PRA), DEA 

must receive approval from the Office of 

Management and Budget (OMB) when a 

rule creates a new information 

collection or modifies an existing 

collection. This approval must be 

granted before an agency can use a 

revised form. In the NPRM, DEA 

discussed the modification of the 

existing information collection which 

would revise Form 225 and add 

questionnaires to the registration 

application process. Within the PRA 

section of the NPRM, DEA explained 

that an interested party could contact 

DEA for a copy of the form and 

questionnaires. The revision of the 

collection is awaiting approval; and, as 

such, DEA cannot yet post the proposed 

revisions to the form online for 

applicants. However, after the form has 

been approved, DEA will post the 

application to its website, and an 

applicant can complete and submit it 

online. DEA will then send the 

applicable questionnaires to the 

applicant after the application has been 

received. 

Issue 5: Some commenters believe 

that DEA’s consideration of an 

applicant’s compliance with Federal 

marihuana law would exclude qualified 

applicants, specifically those who 

operate in compliance with State laws 

that are inconsistent with Federal law. 

Response 5: Congress has established 

by statute the factors that DEA must 

consider when evaluating whether to 

grant an application for registration. For 

an applicant to manufacture a schedule 

I or II controlled substance, DEA must 

consider, among other factors, the 

applicant’s ‘‘compliance with applicable 

State and local law;’’ ‘‘prior conviction 

record . . . under Federal and State 

laws relating to the manufacture, 

distribution, or dispensing of such 

substances;’’ ‘‘past experience in the 

manufacture of controlled substances, 

and the existence in the establishment 

of effective control against diversion;’’ 

and ‘‘such other factors as may be 

relevant to and consistent with the 

public health and safety.’’ 21 U.S.C. 

823(a). An applicant that has 

manufactured marijuana without 

obtaining a DEA registration has 

violated Federal law, see 21 U.S.C. 

841(a), regardless of whether that 

manufacturer has violated the laws of 

the State in which the applicant is 

located. Such activity is relevant to past 

experience in the manufacture of a 

schedule I controlled substance, past 

experience in preventing diversion of a 

controlled substance from other than 

DEA-authorized sources, and the 

promotion and protection of public 

health and safety. Moreover, prior 

conduct in violation of the CSA is 

relevant to determining whether the 

applicant can be entrusted with the 

responsibilities associated with being a 

DEA registrant. Indeed, DEA registration 

is a fundamental component of the CSA, 

and it is wholly appropriate to consider 

an applicant’s past noncompliance with 

the CSA when deciding whether to 

grant a registration under the Act. DEA 

will consider all relevant factors for 

each individual applicant, on a case-bycase basis, when determining whether 

to grant registration, as provided for in 

21 U.S.C. 823(a) and the regulatory text 

at 21 CFR 1318.05. While the DEA 

Administrator has discretion to weigh 

the statutory factors and any one factor 

need not be dispositive, an applicant’s 

prior compliance with Federal law is a 

relevant consideration when 

determining whether to grant an 

application for registration. 

Issue 6: A commenter suggested that 

a notice of exemption for a new drug 

application issued by the Food and Drug 

Administration (FDA) be an alternative 

to obtaining a DEA registration. 

Response 6: The CSA requires anyone 

seeking to manufacture or distribute 

controlled substances to apply for and 

obtain a DEA registration. 21 U.S.C. 

822(a)(1). Using FDA’s authorization of 

a notice of exemption for a new drug 

application would not be in compliance 

with the CSA and therefore cannot be 

considered an alternative for obtaining a 

DEA registration. 

Issue 7: A commenter opined that 

applicants should only be required to 

submit proof of State-issued marihuana 

licenses to DEA, after DEA approves the 

application. 

Response 7: The CSA requires anyone 

seeking to manufacture or distribute 

controlled substances to apply for and 

obtain a DEA registration. 21 U.S.C. 

822(a)(1). In assessing the application, 

DEA also weighs the applicant’s 

compliance with applicable State law. 

21 U.S.C. 823(a)(2). DEA has always 

required applicants seeking to 

manufacture a controlled substance to 

obtain and submit a valid State 

pharmaceutical manufacturer’s license 

to demonstrate compliance with State 

law. Likewise, an applicant seeking to 

manufacture marihuana must submit 

evidence that it possesses a valid State 

manufacturer’s license as part of its 

application, or explain why no such 

license is required by the State to 

manufacture marihuana for use in 

research. This evidence must be 

submitted to DEA as part of the 

determination of whether to grant a 

registration. 

Issue 8: Some commenters suggested 

that the registration requirement be 

waived for marihuana growers 

(manufacturers) who will be supplying 


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8See OLC Op., supra note 5, at 7. 

marihuana to researchers under 21 

U.S.C. 822(d). 

Response 8: DEA-registered 

researchers are not currently allowed to 

obtain marihuana from entities that are 

not registered with DEA. DEA is 

permitted to waive the registration 

requirement if it finds that doing so is 

‘‘consistent with the public health and 

safety,’’ pursuant to 21 U.S.C. 822(d), 

and acting under authority delegated by 

the Attorney General. However, DEA 

has never previously waived the 

registration requirement to allow 

controlled substances to be 

manufactured outside the closed system 

of distribution, and doing so would be 

incompatible with the framework of the 

CSA, which is predicated on 

registration, recordkeeping, and other 

measures of accountability throughout 

the distribution chain. In addition, 

waiving the requirement of registration 

for marihuana growers who supply 

researchers would be inconsistent with 

U.S. obligations under the Single 

Convention.8 It should also be noted 

that supplying marihuana to researchers 

does not demonstrate that the material 

being supplied has been produced in 

accordance with other Federal laws. As 

a result, DEA does not consider such a 

waiver of registration for a bulk 

manufacturer to be a legally viable 

option. 

The scope of this rule addresses the 

registration of manufacturers of 

marihuana, not researchers of 

marihuana. To the degree that the 

commenters were seeking to exempt 

marihuana researchers, rather than 

manufacturers, from registration, in 

addition to the foregoing concerns about 

adherence to treaty obligations, DEA 

does not at this time conclude that there 

is a public health need to exempt 

schedule I researchers from DEA 

registration. DEA notes that over the last 

several years, there has been a 149 

percent increase in the number of active 

researchers registered with DEA to 

perform bona fide research with 

marihuana, marihuana extracts, and 

marihuana derivatives (from 237 in 

November 2014 to 589 in June 2020). At 

present, more researchers are registered 

to conduct research in the United States 

on marihuana, marihuana extracts, and 

marihuana derivatives than on any other 

schedule I substance, and more than 72 

percent of DEA’s total schedule I 

research registrant population (589 of 

808 as of June 2020) is registered to 

conduct research on these substances. 

As a result, DEA concludes that there is 

not currently a public health need to 

exempt researchers from the registration 

requirement. 

Issue 9: Other commenters suggested 

that DEA-registered researchers should 

be exempt from applying for DEA 

manufacturer registrations if the 

researchers are growing marihuana for 

their own studies and not for 

distribution. 

Response 9: As reflected in this rule, 

any person lawfully growing marihuana 

must be registered with DEA to allow 

DEA to fulfill its obligations under the 

CSA. For the reasons discussed above, 

DEA has concluded that this 

requirement cannot be waived for 

researchers. Thus, under this final rule, 

when an applicant, including a 

researcher growing for his or her own 

use, is approved to grow marihuana, the 

applicant is registered as a bulk 

manufacturer. After the applicant is 

approved as a bulk manufacturer, the 

registrant must apply for and be issued 

an individual manufacturing quota 

(IMQ) for the amount of marihuana it 

needs to manufacture to meet the 

legitimate research and scientific needs 

of its customers. If the manufacturer 

plans to use the marihuana grown in 

bulk for its own research, it will also 

need to apply for a procurement quota. 

Under this rule, the DEA registrant must 

sell their harvest to DEA and then 

purchase from DEA the amount that 

they are allowed to procure based on the 

procurement quota issued to them. As 

such, DEA cannot exempt a researcher 

from the requirement of a DEA 

manufacturing registration even if they 

plan to use the marihuana grown for 

their own studies. 

Issue 10: A few commenters suggested 

applicants who applied to be registered 

to grow marihuana soon after DEA 

published its 2016 marihuana growers 

policy should receive priority over more 

recent applicants. On the other hand, 

some commenters suggested that DEA 

should not delay consideration of new 

marihuana grower applications 

submitted after this rule is promulgated, 

as 21 CFR 1318.05(c) provides. In 

particular, some commenters expressed 

confusion about the ‘‘limited exception’’ 

to this delay noted in the NPRM and 

suggested that the limited exception 

should apply to all applicants. 

Response 10: As previously stated in 

the NPRM, applications received after 

the date the final rule becomes effective 

will not be considered until all of the 

applications currently pending have 

been approved or denied, unless an 

application requires action under 21 

U.S.C. 823(i). Applications already 

submitted will receive priority, and as a 

result, DEA will not have to restart its 

consideration of the pool of pending 

applications whenever a new 

application is submitted. 

As described in the NPRM, the 

‘‘limited exception’’ refers to the review 

of applications claiming the benefit of 

the statutory timeline of 21 U.S.C. 

823(i). Congress has set the timeline for 

review of such applications by statute. 

That timeline will apply in lieu of the 

provision at 21 CFR 1318.05(c) for 

applicants that clearly identify 

themselves as 823(i) applicants in their 

original application, and for which DEA 

determines that the applicant qualifies 

for review under 823(i). 

Issue 11: Another commenter 

suggested that the number of applicants 

selected to bulk manufacture marihuana 

should be unlimited and that DEA 

should consider the bulk manufacture of 

marihuana as a coincident activity to a 

researcher registration. 

Response 11: The CSA mandates that 

DEA consider the maintenance of 

effective controls against diversion by 

limiting the bulk manufacture to a 

number of establishments which can 

produce an adequate and uninterrupted 

supply of marihuana under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes. 21 U.S.C. 823(a)(1). 

By statute, DEA is not allowed to 

register an unlimited amount of 

manufacturers, and DEA must perform 

an analysis of each application to 

determine whether the addition of the 

applicant is necessary to provide the 

adequate and uninterrupted supply of 

marihuana for research needs or 

whether the legitimate need will be met 

by the registration of others. 

Currently, researchers are only 

permitted to manufacture as a 

coincident activity in limited quantities 

as set forth in a protocol approved by 

DEA in the researcher’s registration 

application (or re-registration 

application), and to the extent that 

manufacture is not for the purposes of 

dosage form development. 21 CFR 

1301.13(e)(1). A researcher’s planting, 

cultivating, growing, or harvesting of 

marihuana does not constitute such a 

coincident activity to research. Rather, 

the planting, cultivating, growing, or 

harvesting of marihuana requires a 

manufacturer registration obtained 

under 21 U.S.C. 823(a), even when the 

researcher is growing the marihuana for 

his or her own research use. See 21 CFR 

1301.33(d). As described in response to 

Issue 9, and in the section on quota that 

follows, international treaties require 

that DEA control manufacturing of 

marijuana and other schedule I and II 

controlled substances by means of 

quota. Although regulatory provisions 

allow for the approval of certain smallVerDate Sep<11>2014 19:27 Dec 17, 2020 Jkt 253001 PO 00000 Frm 00046 Fmt 4700 Sfmt 4700 E:\FR\FM\18DER1.SGM 18DER1

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Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 82337 

scale manufacturing pursuant to a DEAapproved protocol, significant 

manufacturing, including for research 

purposes, must be performed pursuant 

to a quota to maintain effective controls 

against diversion. As a result, 

researchers must register with DEA as 

manufacturers to engage in significant 

manufacture of controlled substances, 

even if the manufactured substances 

will exclusively be used in the grower’s 

own research. 

In addition, the Single Convention 

obligates a single government agency of 

the United States to purchase and take 

possession of all marihuana 

manufactured, and DEA has concluded 

this includes marihuana manufactured 

for research even when manufactured 

for use in research by the grower. By 

requiring all planting, cultivating, 

growing, and harvesting of marihuana 

be performed by DEA registered 

manufacturers, DEA can ensure that the 

controls set forth in the Single 

Convention are properly applied to all 

registrations to manufacture marihuana 

for research. 

Issue 12: Other commenters suggested 

that the criteria for applicants should 

include the applicant’s ability to 

produce high quality marihuana while 

another commenter suggested that 

applicants should have prior experience 

producing quality cannabis or hemp. 

Response 12: The CSA provides that 

two conditions must be satisfied for an 

applicant to become a registrant: (1) The 

registration must be consistent with the 

public interest, and (2) the registration 

must be consistent with U.S. obligations 

under the Single Convention on 

Narcotic Drugs. Congress defined the 

factors for DEA to evaluate whether 

granting a registration is consistent with 

the public interest in 21 U.S.C. 823(a), 

and the burden lies with the applicant 

to demonstrate that the application 

meets those factors. Under those factors, 

DEA will consider the applicant’s ‘‘past 

experience in the manufacture of 

controlled substances’’ and its 

‘‘promotion of technical advances in the 

art of manufacturing these substances,’’ 

including the applicant’s ability to 

consistently produce and supply 

cannabis of a high quality and defined 

chemical composition. § 1318.05(b)(2). 

DEA must also consider the applicant’s 

overall past experience with controlled 

substances in relation to preventing 

diversion. 

Issue 13: Some commenters suggested 

DEA establish application requirements 

or committees that ensure diversity and 

inclusion of minority applicants. Other 

commenters suggested DEA provide 

regulatory provisions that afford 

economic opportunities to communities 

that have been disproportionately 

impacted by substance abuse and illicit 

drug markets and make application 

selection inclusive to include rural 

farmers, racial minorities, and disabled 

persons. 

Response 13: DEA gives all applicants 

equal treatment regardless of the gender, 

race, socioeconomic status, or disabled 

status of the applicant. The only criteria 

used to evaluate the application for 

registration are those factors defined by 

Congress at 21 U.S.C. 823(a). See 21 CFR 

1318.05. 

Issue 14: Another commenter 

inquired whether manufacturers would 

be permitted to develop contracts, 

partnerships, or cooperative agreements 

with international research and 

development firms. 

Response 14: Registrants are 

permitted to import and export 

controlled substances, including 

marihuana, in accordance with the 

criteria defined at 21 U.S.C. 952(a) 

(import) and 21 U.S.C. 953(a) (export), 

and after obtaining registration in 

accordance with 21 U.S.C. 958. After 

obtaining a registration to manufacture 

marihuana, the applicant may form 

agreements with international firms, 

but, if the importation or exportation of 

marihuana or another controlled 

substance will be involved as part of the 

agreement, it must ensure that any such 

importation or exportation complies 

with 21 U.S.C. 952, 953, and 958, and 

the relevant implementing regulations. 

Moreover, in addition to these general 

regulatory requirements, § 1318.04(b) of 

this rule specifically requires prior 

written notice to DEA of each proposed 

importation or exportation of 

marihuana, and DEA’s express written 

authorization for the importation or 

exportation. 

Quality of Marihuana 

DEA received a number of comments 

that expressed concerns about the 

quality of marihuana that will be 

produced under this rule. 

Issue 1: Some commenters stated that 

the current quality of marihuana 

produced for Federal research is of poor 

quality. 

Response 1: The purpose of this rule 

is to increase the number and variety of 

marihuana growers in order to diversify 

the supply available to researchers. As 

proposed in the NPRM and finalized in 

this rule, one of the selection criteria for 

marijuana grower applicants is the 

‘‘applicant’s ability to consistently 

produce and supply cannabis of a high 

quality and defined chemical 

composition.’’ 21 CFR 1318.05(b)(2). 

Issue 2: A few commenters suggested 

that samples of marihuana should be 

tested to determine the quality prior to 

sales transactions and that 

manufacturers should be allowed to 

send samples of crops before and after 

harvest to analytical labs for testing, 

prior to DEA taking possession. 

Response 2: DEA has no objection to 

DEA-registered marihuana growers and 

buyers exchanging samples or sending 

such samples to analytical labs for 

testing so long as this exchange occurs 

in a manner consistent with the CSA, 

and is amending the rule to make this 

clear. DEA understands that it is 

necessary for registered growers to 

engage in sampling and testing prior to 

harvest or DEA taking possession of the 

crop for growers to demonstrate 

compliance with contractual 

specifications to their researcher 

customers. Prior to the agency taking 

possession of the marihuana harvest, a 

registered grower may collect samples 

and distribute those samples to a DEAregistered analytical laboratory for 

analysis. It is consistent with the Single 

Convention to permit growers to 

conduct sampling and exclude the 

samples from the total crop that DEA is 

required to purchase and possess 

because the Single Convention plainly 

contemplates that growers will be able 

to harvest and sell their marijuana 

crops, and without sampling, sales 

would be practically impossible because 

the final intended purchaser could not 

know whether the marijuana is 

acceptable for purchase. 

DEA is thus modifying the regulations 

proposed in the NPRM to add a new 

section at 21 CFR 1318.04(d). This new 

section explicitly permits DEAregistered manufacturers of marihuana 

to collect samples and distribute them 

to DEA-registered analytical laboratories 

for chemical analysis prior to DEA 

taking possession of the marihuana 

grown. However, to limit the risk of 

diversion and keep the distribution 

within the legitimate purposes 

permitted by the CSA, the quantity of 

samples collected and distributed must 

be small. 

Issue 3: Some commenters stated that 

the time it takes DEA to take possession 

of the marihuana could negatively 

impact the quality of marihuana. 

Response 3: To minimize the risk of 

diversion and delays that may impact 

the quality of the crop, DEA intends to 

take physical possession of the crop 

after harvest and distribute marihuana 

to the purchaser as soon as practicable. 

Issue 4: Many commenters expressed 

concerns that DEA is excluded from 

liability for any damage to crops that 

may occur while in DEA’s possession, 

and that there are no regulations to 

ensure the quality of marihuana while 


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in DEA’s possession. Other commenters 

stated that there is no process or remedy 

for the damage or loss of crops that 

could occur while in DEA’s possession. 

Response 4: DEA assesses the risk of 

marihuana crops being lost or damaged 

while in DEA’s possession to be low. 

DEA does not anticipate retaining 

possession of marihuana crops for long 

periods of time; in most instances, they 

will be transferred quickly from the 

seller to the buyer, with DEA’s 

possession being as brief as possible to 

effectuate its role in transferring the 

marihuana from buyer to seller. In 

addition, crops in DEA’s possession are 

largely expected to be maintained at the 

manufacturer’s registered location, in a 

secure location designated by DEA. 

Accordingly, crops are highly unlikely 

to be damaged or lost in DEA’s 

possession. To avoid costly and 

unnecessary disputes related to any loss 

or damage of crops, § 1318.07 makes 

clear that DEA has no liability with 

regard to the performance of any of the 

terms agreed to by a grower and buyer 

of marihuana, including but not limited 

to the quality of the marihuana. In 

effect, this rule makes clear that buyers 

and sellers should structure their 

marihuana transactions to minimize the 

risk of damage or disputes over quality, 

rather than expecting DEA to mediate or 

bear the costs of such disputes. 

DEA recognizes that some growers 

and buyers may wish the DEA to 

assume a greater role in assuring the 

quality of marihuana supplied to 

researchers. Doing so, however, could 

significantly increase DEA’s costs for 

operating the marihuana grower 

program, which would then be 

transferred to growers and buyers in the 

form of increased administrative fees. 

Thus, given the relatively low risk that 

crops will be lost or damaged in DEA’s 

possession, DEA has concluded that the 

program will provide marihuana to 

researchers most efficiently if DEA does 

not assume any role in quality assurance 

and accordingly does not assume 

liability for such risks. 

Issue 5: One commenter inquired how 

DEA will ensure availability of different 

strains of marihuana for research. 

Response 5: DEA does not have the 

authority to dictate the strains of 

marihuana to be produced by growers. 

Rather, DEA believes that market forces 

will drive the strains of marihuana 

materials that growers will produce, and 

the purchasers will be able to choose 

which DEA-registered grower they 

believe will best produce the strains or 

quality of marihuana that will meet 

their needs. The factors that the 

Administrator will consider in granting 

a registration to grow marihuana will be 

consistent with the public interest 

factors set forth in section 21 U.S.C. 

823(a), including the applicant’s ability 

to consistently produce and supply high 

quality marihuana and defined chemical 

composition and other criteria as 

specified in 21 CFR 1318.05. 

Issue 6: Some commenters suggested 

that DEA-registered researchers be 

allowed to obtain marihuana and 

marihuana products from Stateauthorized sources for the purpose of 

Federal research. 

Response 6: The CSA requires anyone 

seeking to manufacture or distribute 

controlled substances to apply for and 

obtain a DEA registration. 21 U.S.C. 

822(a)(1). State licenses to manufacture 

marijuana do not satisfy the 

requirements of Federal law. See id.; 21 

U.S.C. 841(a)(1). Therefore, possession 

of a license to manufacture marijuana 

issued by a State government or agency 

does not meet the requirements of the 

CSA and cannot be accepted in lieu of 

DEA registration to manufacture or 

distribute. Registrants, including 

researchers, are only authorized to 

possess, manufacture, distribute, or 

dispense controlled substances ‘‘to the 

extent authorized by their registration 

and in conformity with the other 

provisions’’ of the CSA. 21 U.S.C. 

822(b). 

DEA does not view the receipt of a 

schedule I substance from a nonregistrant, distributed in violation of 

§ 841(a), to be ‘‘in conformity with the 

other provisions’’ of CSA as required of 

registrants by § 822(b). The receipt of 

controlled substances from outside the 

CSA’s closed system of distribution is 

incompatible with the framework of the 

CSA, which is predicated on 

registration, recordkeeping, and other 

measures of accountability throughout 

the distribution chain. In addition, as 

discussed above, the CSA—including a 

provision that requires consistency with 

the Single Convention—requires DEA 

to, among other things, register 

marihuana growers and take possession 

of all marihuana crops. Thus, 

authorizing researchers to obtain 

marihuana from unregistered sources is 

inconsistent with the Single 

Convention, and with DEA’s CSA 

enforcement duties. Authorizing such 

research using marihuana from 

unregistered sources may also be 

inconsistent with the requirements of 

other Federal laws, as well as DEA’s 

broader obligation to authorize 

controlled substances research in a 

manner consistent with the public 

safety. 

Moreover, such a change is 

unnecessary. By registering additional 

marihuana growers pursuant to this 

rule, DEA will expand researchers’ 

access to marihuana in accordance with 

the CSA, and in a manner that supports 

the public health. 

Issue 7: Some commenters suggested 

that growers should be allowed to 

perform marihuana-related activities 

that are State-sanctioned but violate 

Federal law, such as distributing 

marihuana to recreational users, in the 

same facilities as DEA-authorized 

marihuana-related activities to save 

costs. 

Response 7: As previously explained, 

DEA cannot authorize marihuana 

growers to violate the CSA or other 

Federal laws. Endorsing the production 

of marihuana outside the CSA’s closed 

system of distribution would be 

incompatible with the framework of the 

CSA, which is predicated on 

registration, recordkeeping, and other 

measures of accountability throughout 

the distribution chain. Authorizing such 

activities would also be inconsistent 

with the Single Convention, and with 

DEA’s CSA enforcement duties, as well 

as contrary to other Federal laws. 

Federal Agency Obligations Pertaining 

to Cannabis Controls 

DEA received several comments 

regarding the division of authority 

between agencies in regulating the 

growing of marijuana for scientific 

research. 

Issue 1: DEA received comments 

asserting that scientific or public healthbased agencies such as the Department 

of Health and Human Services (HHS), 

National Institutes of Health (NIH), 

FDA, or Department of Agriculture 

should oversee the marihuana grower 

program. Some of these commenters 

also suggested that the CSA be amended 

by Congress to allow a health-related 

agency to be in charge of this program. 

Similarly, a commenter suggested that 

DEA contract with a private third party 

and authorize that contractor to carry 

out the functions described in this rule. 

Response 1: DEA agrees that HHS and 

other Federal agencies can offer 

valuable insights into how the Federal 

government can best oversee the 

provision of marihuana for legitimate 

scientific research. DEA is committed to 

collaborating with HHS and other 

Federal agencies to ensure marihuana is 

available to meet the research and 

scientific needs of the United States, 

and that this rule is implemented with 

minimal disruption of the National 

Institute on Drug Abuse (NIDA) Drug 

Supply Program (DSP). That said, as a 

matter of current law, any registration 

and coordination of legitimate 

marihuana growing in the United States 

will be overseen solely by DEA, not 


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9The relevant law is briefly summarized here but 

is discussed in greater depth in the aforementioned 

OLC Opinion. 

10The five functions of Article 23(2) of the Single 

Convention are as follows: (1) Designate the areas 

in which, and the plots of land on which, 

cultivation of the cannabis plant for the purpose of 

producing cannabis or cannabis resin shall be 

permitted; (2) ensure that only cultivators licensed 

by the agency shall be authorized to engage in such 

cultivation; (3) ensure that each license shall 

specify the extent of the land on which the 

cultivation is permitted; (4) require all cultivators 

of the cannabis plant to deliver their total crops of 

cannabis and cannabis resin to the agency and 

ensure that the agency purchases and takes physical 

possession of such crops as soon as possible, but 

not later than four months after the end of the 

harvest; and (5) have the exclusive right of 

importing, exporting, wholesale trading, and 

maintaining stocks of cannabis and cannabis resin, 

except that this exclusive right need not extend to 

medicinal cannabis, cannabis preparations, or the 

stocks of cannabis and cannabis resin held by 

manufacturers of such medicinal cannabis and 

cannabis preparations. 

11The Commentary to the Single Convention 

notes that this is in order to facilitate national 

planning and coordinated management of the 

various tasks imposed upon a country by Article 23, 

and that in countries where more than one agency 

is needed to perform these tasks on constitutional 

grounds, administrative arrangements should be 

made to ensure the required coordination. 

12These issues are discussed further in the OLC 

Opinion. 

13As noted, the relevant legal considerations are 

explored in greater detail in the aforementioned 

OLC Opinion. 

other Federal agencies. In other words, 

even if DEA preferred other Federal 

agencies to carry out these functions, as 

DOJ has interpreted the CSA, including 

a provision requiring that registrations 

be consistent with U.S. obligations 

under the Single Convention, it would 

be unlawful for DEA to transfer these 

functions to another Federal agency. 

Commenters’ suggestions that the law 

should be changed are beyond the scope 

of this rulemaking: This rulemaking 

must follow the law, as enacted by 

Congress.9

As discussed above and in the NPRM, 

under the CSA, DEA may only grant a 

person a registration to grow marihuana 

if: (1) The registration is consistent with 

the public interest, and (2) the 

registration is consistent with U.S. 

obligations under the Single 

Convention. See 21 U.S.C. 823(a). 

Accordingly, DEA may only grant 

marihuana grower registrations which 

are consistent with U.S. obligations 

under the Single Convention. Article 

23(2) of the Single Convention, which is 

applicable to the cultivation of 

marihuana through Article 28, describes 

five functions related to the distribution, 

supervision, and licensing of marihuana 

cultivation 10 that the United States is 

obligated to fulfill as part of a regulatory 

scheme that authorizes the growing of 

marihuana. 

The Single Convention requires that 

these five functions ‘‘be discharged by a 

single government agency if the 

constitution of the Party concerned 

permits it.’’ Single Convention art. 

23(3).11 Nothing in the U.S. Constitution 

precludes the United States from 

discharging all five of those controls 

through one government agency, so a 

single U.S. Federal agency must perform 

all five of the controls. Further, by 

requiring that the functions be 

discharged by a government agency, the 

Single Convention prohibits the United 

States from assigning them to a private 

government contractor. 

Through the CSA, Congress assigned 

the first three of the Single Convention 

functions to DEA by authorizing DEA— 

and, at least at the Federal level, DEA 

alone—to register and regulate 

marihuana growers: Under the CSA, 

DEA effectively designates the area in 

which the marihuana cultivation is 

permitted, limits marihuana growers to 

those it licenses, and specifies the 

extent of the land on which marihuana 

cultivation is permitted as required by 

the Single Convention. Thus, to fully 

comply with the CSA provision 

requiring consistency with the Single 

Convention, DEA also must perform the 

remaining two functions of Article 23: 

Taking possession of marihuana crops 

after harvest and maintaining the 

exclusive right of importing, exporting, 

wholesale trading, and maintaining 

stocks of marihuana and its resin. 

Congress granted DEA the power to 

enforce these provisions by directing 

DEA to grant registrations if the 

registrations are consistent with U.S. 

obligations under the Single 

Convention. 21 U.S.C. 823(a).12

Therefore, Congress has assigned DEA 

the duty and authority to carry out the 

five functions the Federal government is 

required to perform under the Single 

Convention if it authorizes the 

production of marihuana. DEA has no 

authority to assign these functions to 

another agency or a private contractor 

outside the government. Rather, DEA 

must perform the functions itself, and 

this rule will enable DEA to do so more 

effectively. 

Issue 2: Another commenter suggested 

that NIDA be completely removed from 

any role in supplying marihuana to 

researchers. 

Response 2: Marihuana research can 

be enhanced by allowing other growers 

to supply marihuana to researchers. 

However, scientific and medical 

research is likely to benefit from the 

NIDA DSP’s continued involvement in 

these efforts. As discussed in the NPRM 

and further discussed below, the NIDA 

DSP has long played a fundamental role 

in supplying marihuana to researchers. 

In doing so, the NIDA DSP has acquired 

valuable experience and expertise in the 

production of marihuana. Moreover, 

because researchers currently obtain 

their marihuana though the NIDA DSP, 

the continued operation of the NIDA 

DSP will allow researchers who wish to 

continue to receive such NIDA DSP 

marihuana to do so with minimal 

disruption. Ultimately, the purpose of 

this rule is to expand researchers’ 

options for obtaining marihuana, not 

eliminate them, a result best achieved 

by allowing the NIDA DSP to continue 

to operate, while also registering 

additional marihuana growers. 

Issue 3: Some commenters suggested 

that DEA and DOJ misinterpreted the 

Single Convention. Some commenters 

stated that DEA is inappropriately using 

the Single Convention requirements as a 

justification to maintain exclusive 

control over marihuana sales/purchases. 

Another commenter suggested that 

DEA’s view of the Single Convention is 

too narrow and not aligned with other 

parties to the Single Convention with 

respect to Article 23. This same 

commenter suggested that the United 

States withdraw from the Single 

Convention and rejoin with a formal 

reservation opting out of the cannabis 

related provisions of the Single 

Convention. Some other commenters 

suggested DEA initiate the process to 

amend the treaty to accomplish its 

intent of allowing robust research to be 

performed. 

Response 3: As a matter of law, the 

CSA requires that registrations to 

manufacture schedule I and II 

controlled substances be consistent with 

U.S. obligations under the Single 

Convention, which requires a single 

government agency to regulate the 

cultivation of and certain trading in 

marihuana, including taking possession 

of marihuana after harvest.13 The CSA 

assigns this function to the Attorney 

General, who has delegated this 

statutory authority to the DEA 

Administrator. The CSA therefore 

requires DEA to grant registrations that 

are consistent with U.S. obligations 

under the Single Convention, which 

includes regulating the cultivation of 

and certain trading in marihuana. DEA 

acknowledges some may disagree with 

these legal conclusions, but DEA is 

bound by the law as DOJ and DEA 

understand it. Whether the Single 

Convention’s or the CSA’s controls of 

marihuana should be amended and 

whether the United States should 

withdraw from the Single Convention 


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14The exception that allows DEA registered 

manufacturers of medicinal cannabis and cannabis 

preparations to maintain stocks of cannabis 

materials for the purpose of producing such drugs 

or preparations only applies where the raw 

cannabis material was previously delivered to DEA. 

are beyond the scope of this rulemaking 

and DEA’s authority. This rulemaking 

must be consistent with DEA’s 

obligations under the CSA, including 

granting registrations which are 

consistent with the Single Convention 

as it currently stands. 

Issue 4: Some commenters believe 

that DEA’s increased involvement in the 

provision of marihuana to researchers 

would have an adverse impact on 

clinical research, clinical trials, and the 

creation of cannabis preparations. 

Response 4: As explained elsewhere 

in this rulemaking, DEA anticipates this 

rule will increase researchers’ access to 

marihuana for medical and scientific 

research. At present, researchers must 

obtain marihuana for researchers 

through the NIDA DSP, and researchers 

who wish can continue to do so with 

minimal disruption. However, this rule 

will also allow researchers to legally 

obtain marihuana from other DEAregistered growers. DEA’s involvement 

in that process will be limited, as set 

forth in these regulations, to those 

activities required by the CSA. 

Issue 5: Another commenter suggested 

that DEA allow researchers to possess 

marihuana without restriction and that 

DEA’s role in regulating the growing of 

marihuana be completely eliminated. 

Response 5: As explained above, the 

CSA requires any person seeking to 

manufacture or distribute controlled 

substances to apply for and obtain a 

DEA registration. 21 U.S.C. 822(a)(1). 

More broadly, marihuana remains a 

schedule I controlled substance, and as 

such has a high potential for abuse and 

no currently accepted medical use in 

treatment in the United States. See, e.g., 

Denial of Petition to Initiate Proceedings 

to Reschedule Marijuana, 81 FR 53687 

(Aug. 12, 2016). Allowing the 

cultivation of marihuana for research 

without a DEA registration or otherwise 

regulating this activity would be 

incompatible with the CSA and its 

requirement of consistency with the 

Single Convention; it would also fail to 

protect public health and safety from 

the danger of that marihuana being 

diverted and abused. 

Issue 6: One commenter suggested 

that the NPRM is incompatible with the 

Administrative Procedure Act (APA) on 

the grounds that DEA did not 

sufficiently explain the reasoning 

underlying the proposed rule. 

Response 6: The NPRM satisfied the 

requirements of the APA, as does this 

final rule. The NRPM and this rule both 

set out the legal and practical reasons 

why DEA is promulgating this rule to 

increase the availability of marihuana 

for research consistent with the legal 

requirements of the CSA, as well as with 

DEA’s duty to protect the public interest 

by preventing its diversion and abuse. 

Issue 7: Two commenters requested 

that DEA extend the comment period 

given the current coronavirus disease 

2019 public health emergency. 

Response 7: DEA recognizes the 

challenges applicants and registrants 

may be facing during the public health 

emergency. However, DEA has decided 

not to extend the comment period 

beyond the 60 days generally required 

under Executive Order 12866 to avoid 

any further delays in registering 

additional marihuana growers. DEA, 

therefore, decided that extending the 

comment period would have 

unnecessarily delayed the registering of 

additional marihuana growers without 

meaningfully enhancing the rulemaking 

process. 

The Meaning of ‘‘Medicinal Cannabis’’ 

Issue 1: Some commenters expressed 

concern about the definition of 

medicinal cannabis. Specifically, they 

argued that ‘‘medicinal cannabis’’ 

should include any cannabis that State 

law authorized for use as ‘‘medical 

marijuana.’’ One commenter requested 

DEA amend the definition of medicinal 

cannabis to include investigational 

marihuana for an investigational new 

drug. 

Response 1: Under this rule, DEA will 

have the exclusive right of importing, 

exporting, wholesale trading and 

maintaining stocks of marihuana other 

than those held by registered 

manufacturers and distributors of 

medicinal cannabis or cannabis 

preparations.14 The term ‘‘medicinal 

cannabis’’ in this rule is limited to ‘‘a 

drug product made from the cannabis 

plant, or derivatives thereof, that can be 

legally marketed under the Federal 

Food, Drug, and Cosmetic Act,’’ and 

DEA continues to believe this is the 

most appropriate definition for the term. 

Through this rule, DEA is asserting an 

exclusive right of importing, exporting, 

wholesale trading and maintaining 

stocks of marihuana so as to ensure 

compliance with the CSA, including a 

provision requiring registrations to be 

consistent with the Single Convention. 

The exclusion of medicinal cannabis 

from this function is based on Single 

Convention Article 23’s exclusion of 

medicinal opium from parties’ 

obligation to maintain an exclusive right 

over opium trading (as applied to 

cannabis through Article 28). The Single 

Convention does not define medicinal 

cannabis, but its definition of 

‘‘medicinal opium’’ is limited to opium 

that ‘‘has undergone the processes 

necessary to adapt it for medicinal use.’’ 

Single Convention art. 1(o). 

Thus, DEA understands ‘‘medicinal 

cannabis’’ to mean drug products 

derived from cannabis in a form that the 

United States has approved for medical 

use, which is most effectively captured 

in this rule by requiring that the product 

be able to be legally marketed under the 

Food Drug and Cosmetic (FD&C Act). 

The United States, not State 

governments, is the relevant party to the 

Single Convention, and thus ‘‘medicinal 

cannabis’’ should only include 

cannabis-derived products that the 

United States has approved for medical 

use, not products States may have 

approved. 

For similar reasons, this definition 

excludes an investigational new drug 

containing cannabis; such products may 

eventually become approved for full 

medical use in the United States (as 

opposed to research), but have not yet 

obtained such approval. The finished 

dosage form of such a substance may 

qualify as a ‘‘cannabis preparation,’’ 

which is outside of DEA’s exclusive 

right to engage in the wholesale trade in 

cannabis, but remains subject to control 

under the CSA. It should be 

emphasized, however, that the bulk 

material from which any cannabis 

preparation is manufactured must be 

obtained from DEA. 

Security Costs and Requirements 

Applicable to the Manufacture of 

Marihuana 

Issue 1: Some commenters inquired 

about the packaging requirements 

necessary prior to the transport of 

purchased marihuana and once that 

marihuana is sent from a grower to a 

seller. Many commenters suggested DEA 

use tracking technology, similar to that 

used by some States, to monitor the 

movement of marihuana seeds, 

marihuana plants, and other marihuana 

products. Some commenters suggested 

that the use of such tracking technology 

would eliminate the need for the 

security measures proposed in the 

NPRM and required by DEA regulations 

more generally. 

Response 1: DEA registrants are 

required to maintain effective controls 

against diversion. DEA registered 

manufacturers are responsible for 

providing proper security during the 

growing process. The crops must either 

be delivered and stored in a secure 

storage mechanism at the 

manufacturer’s registered location, if 

one is designated by DEA, or delivered 


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15 DEA routinely enters into memoranda of 

agreement with certain registrants. 

to a location designated by DEA. In 

either case, the registrant must comply 

with security requirements specified in 

21 CFR part 1301. A DEA registrant is 

also required to adhere to the 

recordkeeping and reporting 

requirements set forth in 21 U.S.C. 827 

and 21 CFR part 1304, including the 

requirement to maintain records of all 

controlled substances which it 

manufactures, sells, and delivers. 

Although this regulation does not 

specify any special measures imposed 

on a grower for the packaging of a 

marihuana crop for purchase by DEA, 

DEA may develop packaging 

requirements as part of separate 

agreements between DEA and 

individual manufacturers; 15 but in all 

cases, DEA’s general security 

regulations shall apply. 

With regard to tracking technology, 

DEA recognizes that security technology 

is always evolving, and that in some 

circumstances tracking technology may 

present a useful means of protecting 

against diversion. In addition to security 

measures specifically required by DEA 

regulations, registrants should take the 

appropriate measures to guard against 

diversion of their crops, which may 

include the use of new technologies. At 

this time, however, DEA has concluded 

that it is not necessary to update its 

security regulations in this regard, and 

has not yet seen evidence that tracking 

technology can adequately replace 

security measures required by current 

regulations. 

Issue 2: Other commenters suggested 

that the procedures for inspection of 

crops and harvests, and physical 

security requirements are expensive and 

would discourage applicants. 

Response 2: As noted, DEA requires 

all applicants and registrants to 

maintain effective controls against the 

diversion of controlled substances as set 

forth in 21 CFR part 1301. The proposed 

rule and this final rule do not impose 

new or amended regulations for the 

security requirements set forth in 21 

CFR part 1301. Furthermore, DEA 

registrants are subject to routine 

scheduled investigations conducted by 

DEA diversion investigators and other 

administrative requirements such as 

those specified in 21 CFR part 1304. 

DEA understands there will be costs 

incurred in meeting these 

administrative requirements; however, 

these requirements and costs are 

comparable to those applicable to bulk 

manufacturers of other controlled 

substances. Requiring such security 

controls is a critical part of DEA’s efforts 

to fulfill its duties under the CSA to 

reduce the diversion and abuse of 

controlled substances, including 

marihuana. 

Harvest 

Issue: One commenter suggested that 

DEA expand the amount of time to 

deliver a harvest to DEA. This 

commenter also suggested DEA change 

the time period for providing notice of 

a harvest to five days, instead of 15 days 

beforehand, and suggested that the 

amount of harvests per year should be 

changed from three to five. Other 

commenters suggested manufacturers 

provide DEA with notice more than 15 

days prior to harvest. Another 

commenter agreed that DEA should take 

possession of the crop no later than four 

months after harvest to maintain 

chemical composition of the crop. 

Response: DEA understands the 

importance of taking possession of 

harvested crops in a timely manner to 

expedite the re-distribution of those 

crops to researchers and to reduce any 

potential for changes in the crops’ 

chemical composition. As stated in the 

NPRM, and to comply with a CSA 

provision requiring consistency with the 

Single Convention, DEA must take 

physical possession of the crops within 

four months after the end of harvest. 

The requirement that a grower notify 

DEA at least 15 days prior to the 

commencement of a harvest is intended 

to provide DEA with sufficient time to 

make the necessary arrangements for 

traveling to the grower’s registered 

location and to take possession of the 

crops. DEA has concluded that a fiveday notice period will not provide 

sufficient time to make the 

arrangements needed to travel to a 

grower and attend a harvest. 

With respect to this commenter’s 

statement that DEA should change the 

number of harvests per year from three 

to five, DEA is not regulating the 

number of growing cycles that a 

registered grower may conduct. A 

grower may conduct as many growing 

cycles as is necessary to meet customer 

demand, so long as it does not exceed 

its IMQ for the year. The NPRM used 

three harvests per year as the estimated 

average number of harvests only for the 

purpose of conducting its regulatory 

analysis. 

Quotas 

Issue 1: A commenter stated there is 

a significant lag time from when quota 

is issued to harvest time. This same 

commenter inquired as to whether the 

cultivation of marihuana can begin prior 

to the issuance of quota. Another 

commenter suggested that DEA provide 

a deadline by which DEA must review 

or approve bona fide supply agreements 

and make quota determinations based 

upon them. A commenter also suggested 

that each manufacturer should be issued 

IMQ. One commenter suggested that 

DEA issue a multi-year license for new 

bulk manufacturers to meet quota needs. 

Response 1: Pursuant to 21 U.S.C. 

826, DEA is required to ‘‘determine the 

total quantity and establish production 

quotas for each basic class of controlled 

substance in schedules I and II . . . to 

be manufactured each calendar year to 

provide for the estimated medical, 

scientific, research, and industrial needs 

of the United States [and] for lawful 

export requirements.’’ This figure, 

which is known as the aggregate 

production quota (APQ), is then 

allocated to individual registered 

manufacturers based on each 

manufacturer’s application for an IMQ 

as set forth in 21 U.S.C. 826(c). Pursuant 

to section 826(c), DEA is required to 

issue IMQ ‘‘[o]n or before December 1 of 

each year’’ for the following year. 

While there may be significant lead 

time between the date on which an IMQ 

is issued and the date of harvest, a 

grower’s lead time is dependent upon 

the growing techniques it uses. It should 

also be noted that non-botanical 

manufacturers of controlled substances 

frequently deal with significant lead 

times and have been able to manage 

them. In any event, Federal law 

prohibits the manufacturing of a 

controlled substance by a registrant 

which ‘‘is not expressly authorized . . . 

by a quota assigned to him pursuant to’’ 

21 U.S.C. 826. 21 U.S.C. 842(b). 

Thus, a registered manufacturer 

cannot commence growing marihuana 

until it has been granted its IMQ. 

Furthermore, because the CSA expressly 

requires that both the APQ and an IMQ 

be determined on a calendar year basis; 

DEA is not authorized to issue an IMQ 

other than on a single year basis. 

As stated above, the CSA requires that 

DEA issue IMQ ‘‘[o]n or before 

December 1 of each year’’ for the 

following year. Thus, the CSA already 

sets the deadline by which DEA must 

review a bona fide supply agreement 

and make a quota determination. Each 

registered manufacturer of marijuana 

who produces evidence that it has 

entered into a bona fide supply 

agreement with a researcher will be 

issued an IMQ. In the event a registered 

manufacturer enters into additional 

bona fide supply agreements after 

receiving its IMQ, which would result 

in an increase in its estimated net 

disposal for the calendar year, it may 

apply for an increase in its IMQ for that 

calendar year. 21 CFR 1303.25. 


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Issue 2: A commenter suggested that 

the price and quantity of extracts is not 

based on dried flower weight and that 

different strains of marihuana will yield 

different extract weights from the same 

weight of marihuana. Thus, this 

commenter argued, DEA should set 

marihuana quotas based on the amount 

of marihuana extract produced from a 

harvested marihuana crop, not the 

weight of the harvested marihuana 

itself. 

Response 2: Under the CSA, IMQ 

limits the quantity of controlled 

substances a manufacturer may 

produce. See, e.g., 21 U.S.C. 826(c). 

Marihuana itself, not just its extract, is 

a schedule I controlled substance. 

Accordingly, when a marihuana grower 

cultivates a marihuana crop, that grower 

has produced a schedule I controlled 

substance. Thus, under the CSA, 

marihuana growers require an IMQ for 

the entire marihuana crop, regardless of 

the value or quantities of other 

controlled substances produced from 

that crop. Setting marihuana quota 

based solely on the amount of extract 

eventually produced would also inhibit 

quota enforcement, as DEA may not be 

able to determine if a marihuana grower 

was complying with its IMQ until the 

grower processed the marihuana into an 

extract. Finally, not all marihuana 

grown will necessarily be used to 

produce extracts—some marihuana 

research makes use of the plant material 

itself. Thus, not all marihuana 

production quotas could be tied to the 

quantity of extract produced from it, 

because not all marihuana grown for 

research is converted into an extract. 

Costs, Pricing, and Fees of Marihuana 

for DEA Registrants 

Issue 1: A commenter inquired how 

the purchase price is established when 

DEA purchases cannabis from a 

registrant that the registrant intends to 

use for his/her own research. 

Response 1: This scenario was 

addressed in the NPRM by proposed 21 

CFR 1318.06(b)(4), which this rule 

promulgates without change. Normally, 

under the rule, the seller and buyer may 

negotiate their own purchase price, to 

which DEA will add its administrative 

fee. When a registrant grows marihuana 

for its own use, the purchase price is 

irrelevant, given that the grower is 

effectively negotiating the price with 

itself. Thus, the rule will allow the 

grower to set any ‘‘nominal price’’ it 

chooses, given that the grower will 

purchase the marihuana back from DEA 

at the same price at which it is sold to 

DEA. In this scenario, the only net cost 

of the transaction is the per-kilogram 

administrative fee that grower must pay 

to DEA. 

Issue 2: Several commenters 

suggested the purchase price of 

cannabis should be the registrant’s 

average purchase price of the last six 

months or the average U.S. price for 

high grade commercial cannabis, plus 

20 percent due to its research grade. 

Another commenter suggested a cap on 

the wholesale value of cannabis. 

Response 2: DEA recognizes that 

supply and demand for the cultivation 

of marihuana for research and other licit 

purposes may fluctuate based on the 

lawful needs of the U.S. market. As 

such, DEA believes that allowing the 

buyer and seller to negotiate the 

purchase price of the marihuana 

provides more flexibility in determining 

appropriate prices driven by market 

forces. Attempting to set a universal 

price—or schedule of prices—for 

cannabis, or limiting a registrants’ 

ability to change its prices in response 

to new circumstances, would unduly 

restrict the varieties of marihuana grown 

and may unduly limit growers’ ability to 

produce marihuana to satisfy new 

research needs. Similarly, setting a price 

cap may prevent growers from meeting 

researchers’ need for cannabis that is 

unusually expensive given its strain or 

the conditions in which it must be 

grown. 

Issue 3: A commenter inquired 

whether the administrative fees are paid 

by the purchasing researchers or the 

selling growers. 

Response 3: Under the rule, the 

administrative fee is considered part of 

the price of the cannabis DEA sells to 

the purchasing researcher. That said, the 

rule requires the ‘‘parties’’ to pay the fee 

to DEA upon entering into a contract for 

the provision of cannabis, but before the 

cannabis is actually delivered to the 

researcher. In other words, DEA is not 

charging the administrative fee to either 

party in particular, but to the parties 

jointly as part of the transaction. The 

parties are free to apportion the fee 

among themselves in any way they 

choose. 

Issue 4: Some commenters suggested 

that the administrative fee be waived for 

DEA-registered manufacturers who 

cultivate and research their own 

marihuana, and do not sell their 

marihuana. Similarly, some commenters 

suggested that the administrative fee 

would discourage research and thus 

suggested that the administrative fee be 

waived for researchers in general. 

Response 4: As explained in the 

NPRM, the purpose of the 

administrative fee is to allow DEA to 

recover the operational costs of 

administering the program, as required 

under 21 U.S.C. 886a(1)(C). Because 

DEA anticipates the vast majority of 

marihuana will be sold to researchers, a 

waiver of the administrative fee in 

transactions involving researchers 

would not allow DEA to properly 

recover its costs of administering the 

marihuana growers program under 21 

U.S.C. 886a(1)(C). 

DEA nonetheless continues to 

encourage lawful cultivation of 

marihuana for research and other licit 

purposes through the administration of 

this program. As discussed in the NPRM 

and below, DEA does not expect this 

administrative fee to be a barrier to 

research. Nothing in this rule prohibits 

NIH—or any other third-party funder of 

research grants—from funding 

marihuana research by covering the cost 

of marihuana materials used in research, 

including these administrative fees, via 

grants to researchers. 

DEA also cannot waive the 

administrative fee for researchers 

growing marihuana for their own use 

because that too would prevent DEA 

from recovering its operational costs. 

The provisions of this rule—and the 

CSA and DEA regulations more 

broadly—apply not only when a grower 

is selling to a third party, but also when 

a grower is producing marihuana for its 

own use. DEA must still register the 

grower, and purchase and take 

possession of the marihuana, even if the 

marihuana is being used for the grower’s 

own research. Thus, DEA does not 

anticipate its operational costs to be 

significantly less when it is regulating a 

grower’s cultivation of marihuana for its 

own research or for another party’s use. 

Accordingly, DEA will charge the same 

fees in both situations. 

Issue 5: One commenter requested 

that DEA clarify administrative fees. 

Response 5: The nature and purpose 

of the administrative fee, as well as how 

it is set, are explained both in the rule 

itself and throughout the NPRM. In sum, 

an administrative fee for each 

transaction will be added to the sales 

price of the marihuana. The 

administrative fee is a variable fee based 

on the quantities, in kilogram (not 

quality, grade, potency, etc.) of bulk 

marihuana distributed. The parties to 

the transaction will pay DEA the 

administrative fee upon entering into a 

contract for the provision of the 

marihuana and prior to the delivery of 

the marihuana. DEA will set the 

administrative fee rate at least annually 

at a level adequate to allow DEA to 

recover the costs of administrating the 

marihuana growers program under 21 

U.S.C. 886a(1)(C). 

Issue 6: One commenter suggested 

that DEA waive the administrative fee 


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16The rule refers to those ‘‘seeking to plant, grow, 

cultivate, or harvest marihuana’’ rather than just to 

‘‘grow’’ or ‘‘cultivate,’’ to ensure that all activities 

related to growth and cultivation are included. 

for any crops that are damaged or lost 

while in DEA’s possession. 

Response 6: Such a fee waiver is 

unnecessary and inconsistent with 

DEA’s obligations under the CSA and 

this rule. As explained elsewhere, DEA 

generally does not anticipate retaining 

possession of crops for significant 

periods of time; in most instances, they 

should be transferred quickly to the 

buyer. Accordingly, crops are unlikely 

to be damaged or lost in DEA’s 

possession. Moreover, as explained 

above, the administrative fee must be set 

at a rate that allows DEA to recover the 

costs of operating the marihuana 

growers program under 21 U.S.C. 

886a(1)(C). Every marihuana transaction 

under this rule will impose costs on 

DEA. Thus, if DEA waived fees for some 

marihuana buyers and sellers, it would 

have to increase fees on other buyers 

and sellers to compensate for the 

amounts lost due to the waiver. DEA has 

concluded that it is most equitable to 

base the administrative fee on the 

weight of marihuana produced, and not 

other factors. 

Out of Scope 

Issue: DEA received comments that 

are outside the scope of this final rule. 

Some comments raised general concerns 

regarding the treatment of marihuana 

under Federal law. Others raised 

specific issues regarding, among other 

things, medical illnesses, medical 

treatments, the scheduled class of 

marihuana, marihuana-related activities 

permitted and prohibited in specific 

States, and the status of previous 

congressional inquiries. 

DEA Response: DEA acknowledges 

receipt of these comments; however, 

such comments are outside the scope of 

the NPRM and the final rule. These 

comments ultimately have no bearing 

on the rule under consideration, or on 

the regulatory decisions DEA is making 

as part of this rulemaking. 

Section-by-Section Summary of the 

Final Rule 

The purposes and functions of this 

rule were discussed in the NPRM. Aside 

from a minor amendment to 21 CFR 

1318.04, this rule adopts the proposed 

rule without change. DEA’s reasoning 

was fully explained in the NPRM. 

However, in addition to describing the 

amendment—in particular, the added 

section at § 1318.04(d)—DEA will 

summarize this rule’s various changes to 

DEA regulations and the reasoning 

behind these changes for the sake of 

clarity and convenience. 

§ 1301.33: Applying the Marihuana 

Grower Regulations to All Marihuana 

Growers 

This rule makes two technical 

changes to 21 CFR 1301.33 to account 

for the addition of part 1318, which in 

turn provides regulations specific to the 

growing of marihuana in accordance 

with the CSA. 

As discussed above, part 1301 of 

DEA’s regulations governs the 

registration of manufacturers, 

distributors, and dispensers of 

controlled substances. It also includes 

various sections governing how entities 

are to apply to become registered with 

DEA. See, e.g., 21 CFR 1301.13–17. 

These sections include § 1301.33, which 

contains certain provisions unique to 

applications to become registered to 

manufacture schedule I and II 

substances in bulk. For example, 

§ 1301.33(a) requires that DEA publish a 

notice of application after receiving a 

schedule I and II bulk manufacturer 

application. Previously, § 1301.33(c) 

provided that the other provisions of 

§ 1301.33 do not apply when the 

manufacturing at issue is ‘‘as an 

incident to research or chemical 

analysis as authorized in 

§ 1301.13(e)(1),’’ i.e., when the bulk 

manufacture is a coincident activity of 

a DEA-registered researcher or chemical 

analyst. 

This rule amends § 1301.33(c) to 

modify this exception in the case of 

marihuana growing. Specifically, under 

this rule, § 1301.33(c)’s exclusion 

applies to manufacturing as an incident 

to research and chemical analysis, 

except as provided in the newly added 

§ 1301.33(d). And the new § 1301.33(d) 

provides that an application to 

manufacture marihuana ‘‘that involves 

the planting, cultivating, growing, or 

harvesting of marihuana’’ (as opposed 

to, for example, marihuana 

manufacturing that merely involves 

processing marihuana grown by another 

party into a new marihuana product) 

shall be subject both to the general 

requirements of § 1301.33 as well to the 

newly added requirements of part 1318. 

This change serves two purposes. 

First, by cross-referencing part 1318 in 

part 1301, this change ensures that 

marihuana grower applicants reviewing 

the general registration and application 

requirements in part 1301 are made 

aware of the regulations specific to 

marihuana growers in part 1318. 

Second, the Single Convention does not 

distinguish marihuana grown by a 

researcher or chemical analyst from that 

grown by other manufacturers; under 

the Single Convention, a government 

agency is required to purchase and take 

possession of that marihuana and then 

oversee its distribution. Thus, both to 

ensure that DEA complies with the CSA, 

including a provision requiring 

consistency with obligations under 

international treaties such as the Single 

Convention, and to ensure that these 

applications are treated as equitably as 

possible, DEA is amending its 

regulations to ensure that all marihuana 

growers are subject to the requirements 

of both § 1301.33 and part 1318. 

§ 1318.01: The Scope of the New 

Marihuana Grower Regulations 

New 21 CFR part 1318 adds a series 

of new provisions to ensure that DEA 

can register additional marihuana 

growers in a way consistent with its 

obligations under the CSA, including a 

provision requiring consistency with the 

Single Convention. New § 1318.01 

clarifies the scope of these new 

provisions, stating that they govern ‘‘the 

registration of manufacturers seeking to 

plant, grow, cultivate, or harvest 

marihuana.’’ 

Among other things, this serves to 

make clear that part 1318 only applies 

to those manufacturers involved in 

activities related to the cultivation of 

marihuana, not all forms of marihuana 

manufacturing. The CSA defines 

‘‘manufacturing’’ broadly as ‘‘the 

production, preparation, propagation, 

compounding, or processing of a drug or 

other substance,’’ including extraction 

from plant products and certain forms of 

packaging. 21 U.S.C. 802(15). Thus, 

under the CSA, entities involved in a 

variety of marihuana-related activities, 

not just marihuana growers, are required 

to register with DEA as marihuana 

manufacturers. 

Section 1318.01 emphasizes that part 

1318 does not apply to all marihuana 

manufactures, but only to those 

involved in the planting, growing, 

cultivating, or harvesting of 

marihuana.16 Part 1318 limits itself to 

marihuana growers, rather than all 

manufacturers, given the unique 

obligations the Single Convention 

places on the United States with regard 

to the growing of marihuana and the 

unique diversion risks growing presents. 

§ 1318.02: Definitions 

Part 1318 contains a number of terms 

that are not used elsewhere in DEA 

regulations or have a unique meaning 

when used in the context of part 1318. 

Thus, to avoid any ambiguity about the 

meaning of those terms and the 

regulations in which they are used, 


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17Article 1 of the Single Convention defines 

‘‘medicinal opium’’ and ‘‘opium preparations.’’ 

These definitions apply to cannabis through Article 

28, which, with limited exception, subjects the 

cultivation of cannabis to the system of controls set 

forth in Article 23 with regard to the cultivation of 

opium. DEA adapted the Single Convention’s 

definitions to reflect governing Federal law, 

including the FD&C Act and the CSA. 

§ 1318.02 specifically defines those 

terms for the purposes of part 1318. 

Most of the definitions in § 1318.02 

are self-explanatory. For example, 

‘‘cannabis’’ means any plant of the 

genus Cannabis (unless otherwise 

excepted, as discussed below), and 

‘‘cannabis resin’’ (with one exception 

discussed below) means the separated 

resin, whether crude or purified, 

obtained from the cannabis plant. 

Similarly, the definition of ‘‘Single 

Convention’’ includes a citation to 

eliminate any possible confusion about 

the Single Convention at issue, and the 

definition of ‘‘bona fide purchase 

agreement’’ specifies the broad type of 

agreements DEA is seeking to 

encompass by this term. 

Several provisions of § 1318.02, 

however, warrant further discussion. 

First, as discussed in the NPRM and 

above, the Single Convention exempts 

‘‘medicinal cannabis’’ and ‘‘cannabis 

preparations’’ from certain of its 

requirements. Following suit, part 1318 

likewise exempts these substances from 

certain of its provisions, and, to 

facilitate this exemption, § 1318.02 

defines ‘‘medicinal cannabis’’ and 

‘‘cannabis preparations.’’ Under 

§ 1318.02, ‘‘medicinal cannabis’’ means 

a drug product made from the cannabis 

plant, or derivatives thereof that can be 

legally marketed under the FD&C Act. 

‘‘Cannabis preparation’’ means cannabis 

that was delivered to DEA and 

subsequently converted by a registered 

manufacturer into a mixture (solid or 

liquid) containing cannabis or cannabis 

resin. These definitions track those of 

the Single Convention, as adapted to 

account for Federal law.17

Finally, § 1301.02(e) clarifies that, 

when used in part 1318, none of these 

cannabis-related terms—cannabis, 

cannabis preparation, cannabis resin, or 

medicinal cannabis—include substances 

that fall outside the CSA’s definition of 

marihuana. Among other things, 

§ 1301.02(e) is intended to reflect the 

CSA amendments made by the 

Agriculture Improvement Act of 2018 

(AIA), Public Law 115–334. The AIA 

amended the definition of marihuana to 

exclude ‘‘hemp,’’ defined as the plant 

Cannabis sativa L. and any part of that 

plant, including the seeds thereof and 

all derivatives, extracts, cannabinoids, 

isomers, acids, salts, and salts of 

isomers, whether growing or not, with a 

delta-9 tetrahydrocannabinol 

concentration of not more than 0.3 

percent on a dry weight basis. 7 U.S.C. 

1639o(1). Thus, under the AIA, anything 

that meets this definition of hemp is no 

longer a controlled substance, and the 

CSA’s requirements no longer apply to 

it. This rule is designed to regulate 

marihuana growers, not hemp growers; 

and thus § 1301.02(e) ensures that part 

1318 does not apply to the cultivation 

of substances do not meet the definition 

of marihuana under the CSA, such as 

hemp. 

§ 1318.03: Implementation of the CSA’s 

Requirements 

This section reiterates the 

requirements of certain other provisions 

of the CSA and DEA regulations, both to 

make clear that these requirements 

apply to marihuana grower applications 

and as background for other provisions 

of part 1318. Specifically, § 1318.03(a) 

reiterates the requirement of 21 U.S.C. 

823(a) that the DEA Administrator may 

only grant an application to cultivate 

marihuana if he determines that such 

registration is both consistent with the 

public interest and with U.S. obligations 

under the Single Convention. Section 

1318.03(b) states that, in accordance 

with both 21 U.S.C. 823(a) and 21 CFR 

1301.44, the applicant has the burden of 

demonstrating that these requirements 

are satisfied. 

§ 1318.04: Specific Control Measures 

Applicable to the Cultivation of 

Marihuana 

This section adds a series of control 

measures designed to ensure that, once 

DEA registers additional marihuana 

growers, their marihuana cultivation 

occurs in accordance with the CSA, 

including the provision that requires 

registrations be granted consistent with 

the Single Convention. In particular, 

this section adds regulations that will 

ensure that DEA is able to purchase and 

take possession of marihuana crops 

within four months of harvest, and also 

that DEA has the exclusive right of 

importing, exporting, wholesale trading, 

and maintaining stocks of marihuana 

(other than medicinal cannabis or 

cannabis preparations)—both functions 

that the Single Convention expressly 

requires a single agency of the Federal 

government to perform. This section 

also contains provisions describing how 

DEA will perform these functions, 

provisions that are designed both to 

guide DEA’s performance of these duties 

(and growers’ expectations) as well as to 

ensure that these functions are 

performed in a way that protects against 

diversion of marihuana without placing 

an undue burden on growers. These 

provisions—and how they apply to 

particular scenarios—are discussed in 

greater depth both above and in the 

NPRM. 

Finally, this section adds a provision 

that explicitly provides an allowance for 

registered bulk manufacturers of 

marihuana to distribute samples to 

registered analytical laboratories. 

Because these samples are small, 

distributed to the laboratory solely for 

the purpose of analysis, and consumed 

in the course of the analysis or 

destroyed upon completion of the 

testing, DEA has determined that DEA is 

not required to take possession of these 

samples to satisfy U.S. obligations under 

the Single Convention. This allowance 

permits registered bulk manufacturers to 

monitor the cannabinoid content of 

their crop in order to properly time their 

harvest and demonstrate compliance 

with contract specifications to their 

customers. 

§ 1318.05: Applying the CSA’s Public 

Interest Factors to Marihuana Grower 

Applicants 

As indicated above, in addition to 

ensuring registration is consistent with 

its Single Convention obligations, DEA 

may grant a registration to manufacture 

a schedule I or II controlled substance 

only where the Administrator 

determines that the registration is 

consistent with the public interest, 

based on the factors listed in 21 U.S.C. 

823(a). 

This section both reiterates these 

public interest factors and explains how 

DEA will evaluate whether a particular 

marihuana grower application is 

consistent with them. For example, 

under 21 U.S.C. 823(a)(1), DEA must 

weigh, as one of the registration factors, 

the need to maintain effective controls 

against diversion by limiting the 

number of registered bulk marihuana 

growers to that which can produce an 

adequate and uninterrupted supply of 

marihuana under adequately 

competitive conditions. Section 1318.05 

states that, for the purpose of assessing 

this factor, a bona fide supply agreement 

between a marihuana grower and a duly 

registered schedule I researcher or 

manufacturer provides evidence that an 

applicant’s registration is necessary to 

produce an adequate and uninterrupted 

supply of marihuana under adequately 

competitive conditions. An applicant 

proposing to grow marihuana to supply 

its own research may also be deemed to 

have satisfied this aspect of public 

interest factor 823(a)(1) upon the 

presentation of evidence that it 

possesses a registration to conduct 


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research with marihuana under 21 CFR 

1301.32. 

The rule also provides that, when 

selecting marihuana grower registrants, 

the DEA Administrator will place 

particular emphasis on an applicant’s 

ability to consistently produce and 

supply marihuana of a high quality and 

defined chemical composition, and 

whether the applicant has demonstrated 

prior compliance with the CSA and 

DEA regulations. These factors are 

designed to result in registration of 

those manufacturers of marihuana that 

can most efficiently supply the lawful 

needs of the U.S. market in terms of 

quantity and quality. These factors are 

further aimed at selecting applicants 

that can be entrusted with the 

responsibility of a DEA registration and 

complying with the corresponding 

obligations under the CSA and DEA 

regulations. 

Section 1318.05(c) provides that, 

aside from any applications governed by 

21 U.S.C. 823(i), applications DEA 

accepts for filing after the date this rule 

becomes effective will not be considered 

pending until all applications accepted 

for filing on or before this effective date 

have been granted or denied by the 

Administrator. This is because, as 

explained above, the CSA requires DEA 

to consider the need to maintain 

effective controls against diversion by 

limiting the total number of registered 

marihuana growers to that necessary to 

produce an adequate and uninterrupted 

supply of marihuana under adequately 

competitive conditions. Thus, DEA 

must consider all pending applicants 

together when deciding which 

applications to grant. Given this 

requirement, DEA is including this 

provision to avoid a situation in which 

the agency is in the midst of evaluating 

these applications and has to begin its 

evaluation anew each time it accepts a 

new marihuana grower application for 

filing. 

§ 1318.06: Factors Affecting Marihuana 

Prices 

As discussed in the NPRM and above, 

to ensure compliance with the CSA, 

including a provision requiring 

consistency with the Single Convention 

(and as specified in § 1301.04 of this 

rule), DEA will purchase all lawfully 

grown marihuana crops within four 

months of harvest and then sell the 

marihuana to DEA registrants who seek 

to acquire it for research, product 

development, or other lawful purposes 

under the CSA. To do so, DEA will 

establish purchasing and selling prices: 

§ 1318.06 describes how DEA will do 

this—and more broadly explains how 

certain aspects of these transactions will 

work, as well as how DEA will fund its 

expenses from carrying out these duties. 

As explained elsewhere in the NPRM 

and this rule, in purchasing such 

marihuana, DEA will use the Diversion 

Control Fee Account established in 21 

U.S.C. 886a. Thus, DEA must take into 

account its obligation under 21 U.S.C. 

886a(1)(C) to charge fees under its 

diversion control program ‘‘at a level 

that ensures the recovery of the full 

costs of operating the various aspects of 

that program.’’ There are two potential 

categories of fees that could be used to 

recover the costs of carrying out the new 

aspects of the diversion control program 

relating to marihuana: (1) Fees charged 

to persons who apply for, and seek to 

renew, a DEA registration to 

manufacture marihuana, and (2) fees 

charged for the sale of marihuana by 

DEA. Under this rule, DEA intends to 

recover its basic operating costs 

primarily through the latter means, by 

recovering these costs through an 

administrative fee set based on these 

costs. Section 1318.06 describes how 

this will occur. 

Under § 1318.06, DEA will allow 

market forces to direct prices for 

marihuana grown by the manufacturer 

and purchased by DEA, allowing the 

marihuana grower and ultimate 

purchaser to negotiate a sales price. 

Where the grower and the buyer are the 

same entity (or related entities), 

§ 1318.06 allows the entity to set a 

nominal price. 

In addition to that negotiated price, 

§ 1318.06 provides that DEA will add an 

administrative fee (per kilogram (kg)) to 

the sales price of the marihuana it sells 

to end users. As provided in 

§ 1318.06(a), DEA will calculate this 

administrative fee no less than annually 

by taking the preceding fiscal year’s cost 

to operate the program and dividing it 

by the quantity in kg of the total of the 

IMQs for marihuana issued during the 

current quota year. Section 1318.06(c) 

requires DEA to make the updated 

administrative fee available on DEA’s 

website. 

As discussed elsewhere, DEA does 

not intend for this rule to interfere with 

HHS’s funding of marihuana for use in 

research. Thus, to avoid any possibility 

of confusion, § 1318.06(d) notes that this 

section does not prohibit HHS from 

funding the purchase cost or associated 

administrative fees for marihuana 

purchased for research. 

§ 1318.07: DEA’s Disclaimer of Liability 

As explained above, DEA generally 

does not anticipate retaining possession 

of marihuana crops for significant 

periods of time: In most instances, they 

should be transferred quickly from the 

seller to the buyer, with DEA’s 

possession being as brief as possible to 

effectuate its role in transferring the 

marihuana from buyer to seller. 

Accordingly, crops are highly unlikely 

to be damaged or lost in DEA’s 

possession. That said, if a buyer 

concludes that a crop is unacceptable, it 

is conceivable that a grower could claim 

that the damage is attributable to DEA, 

leading to costly and unnecessary 

disputes. To avoid disputes, § 1318.07 

makes clear that DEA has no liability 

with regard to the performance of any of 

the terms agreed to by a grower and 

buyer of marihuana, including but not 

limited to the quality of the marihuana. 

In effect, this puts buyers and sellers on 

notice that it is their obligation to 

structure their marihuana transactions 

in such a way as to minimize the risk 

of damage or disputes over quality, 

rather than looking to DEA to mediate 

or bear the costs of such disputes. 

Regulatory Analyses 

Executive Orders 12866 (Regulatory 

Planning and Review), 13563 

(Improving Regulation and Regulatory 

Review), and 13771 (Reducing 

Regulation and Controlling Regulatory 

Costs) 

This rule was developed in 

accordance with the principles of 

Executive Orders 12866, 13563, and 

13771. Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health, 

and safety, and other advantages; 

distributive impacts; and equity). 

Executive Order 13563 is supplemental 

to and reaffirms the principles, 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. Section 3(f) of 

Executive Order 12866 classifies a 

‘‘significant regulatory action,’’ 

requiring review by the Office of 

Management and Budget (OMB), as any 

regulatory action that is likely to result 

in a rule that may: (1) Have an annual 

effect on the economy of $100 million 

or more or adversely affect in a material 

way the economy, a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or tribal 

governments or communities; (2) create 

a serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

materially alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs or the rights and obligations of 


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82346 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 

18This is an increase from the estimated cost of 

$607,644 in the NPRM. The increase is due to 

change in estimated personnel requirements as 

described below. 

19The ‘‘authorizing agency’’ refers to federal 

government agencies, including NIDA and DEA. 

20Production, Analysis, and Distribution of 

Cannabis and Related Materials, Federal Business 

Opportunities (Apr. 12, 2015), https://www.fbo.gov/ 

spg/HHS/NIH/NIDA-01/N01DA-15-7793/ 

listing.html. 

21NIDA’s Role in Providing Marijuana for 

Research, National Institute on Drug Abuse, https:// 

www.drugabuse.gov/drugs-abuse/marijuana/nidasrole-in-providing-marijuana-research. 

22 Information on Marijuana Farm Contract, 

National Institute on Drug Abuse, https://

www.drugabuse.gov/drugs-abuse/marijuana/nidasrole-in-providing-marijuana-research/informationmarijuana-farm-contract. 

23Conference call between DEA Regulatory 

Drafting and Policy Support section and members 

of NIDA’s Marijuana Drug Supply Program, July 30, 

2019. 

24Estimated spending for the marihuana DSP for 

2019 was $3.3 million to $3.4 million, of which 

10%-15% meet the definition of ‘‘hemp’’ under the 

provisions of the AIA. Using the midpoint of these 

ranges, the estimated spending is $2.9 million for 

marihuana, excluding hemp. The figures are based 

on a general discussion, and actual figures may 

differ. 

25The 2019 APQ for all marihuana is 2,450 kgs. 

2,000 of the 2,450 kgs are for the NIDA (National 

Center) cultivating and manufacturing quota of bulk 

marihuana. See 83 FR 67348. 

26Marijuana Plant Material Available from the 

NIDA Drug Supply Program, National Institute on 

Drug Abuse, https://www.drugabuse.gov/research/ 

research-data-measures-resources/nida-drugsupply-program/marijuana-plant-materialavailable-nida-drug-supply-program. 

27Conference call between DEA Regulatory 

Drafting and Policy Support section and members 

of NIDA’s Marijuana Drug Supply Program, July 30, 

2019. 

recipients thereof; or (4) raise novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

OMB’s Office of Information and 

Regulatory Affairs (OIRA) has 

determined that, although this rule is 

not economically significant, it is a 

significant regulatory action under 

section 3(f) of Executive Order 12866, 

and it therefore has been reviewed by 

OMB. 

I. Need for the Rule 

This rule is needed to ensure that 

DEA complies with the CSA and grants 

registrations that are consistent with 

relevant treaty provisions as DEA seeks 

to increase the number of registered 

growers of marihuana. Specifically, this 

rule amends the provisions of the 

regulations governing applications by 

persons seeking to become registered 

with DEA to grow marihuana as bulk 

manufacturers and adds provisions 

related to the purchase and sale of this 

marihuana by DEA. These amendments 

will ensure that DEA carries out all five 

functions under Article 23 and Article 

28 of the Single Convention pertaining 

to marihuana, thus facilitating the 

planning and coordinated management 

of marihuana production necessary as 

the number of registered marihuana 

manufacturers increases. 

II. Alternative Approaches 

This rule amends DEA regulations 

only to the extent necessary to comply 

with the CSA and to ensure DEA grants 

registrations that are consistent with the 

Single Convention as it pertains to 

marihuana. In areas where DEA has 

discretion, such as in setting a fee 

structure to recover the cost of this rule, 

alternative approaches normally would 

be discussed. However, because DEA 

does not have sufficient information at 

this time to discuss alternatives for 

either the future registration fees or the 

fees for the sale of marihuana, the 

alternative approaches for such 

provisions are not included in this rule. 

Consistent with past agency practice, 

any changes to registration fees will be 

the subject of a separate rulemaking 

proceeding, including a discussion of 

alternative approaches. 

III. Analysis of Benefits and Costs 

There are two key benefits associated 

with this rule. First, DEA believes it is 

possible that the approval of new 

growers may increase the variety 

(quality, potency, etc.) of bulk 

marihuana for research, leading to more 

effective research and potentially 

resulting in the development of FDAapproved drug products. Second, this 

rule ensures that DEA’s regulations 

comply with the requirements of the 

CSA by granting registrations that are 

consistent with the Single Convention 

relating to marihuana. DEA is unable to 

quantify these benefits at this time. 

DEA analyzed the costs of this rule 

and estimates an annual cost of 

$651,318.18 The details of the analysis 

are below. 

This rule amends the provisions of 

the regulations governing applications 

by persons seeking to become registered 

with DEA to grow marihuana as bulk 

manufacturers and adds provisions 

related to the purchase and sale of this 

marihuana by DEA. Upon promulgation 

of this rule, the following key changes 

are anticipated: More persons will be 

authorized to grow marihuana, DEA will 

purchase and take title to the crops of 

marihuana, and DEA will, with respect 

to marihuana, have the exclusive right 

of importing, exporting, wholesale 

trading, and maintaining stocks. These 

changes mean that authorized 

purchasers of bulk marihuana to be used 

for research, product development, and 

other purposes permitted by the CSA 

may only purchase from DEA, except 

that DEA’s exclusive rights do not 

extend to medicinal cannabis or 

cannabis preparations. The changes 

described above affect three primary 

groups of entities: Growers and 

prospective growers, the authorizing 

agencies,19 and purchasers (generally 

medical and scientific researchers). To 

examine the impact of the rule, DEA 

first reviewed the current system for 

growing and distributing bulk 

marihuana, then examined the impact 

on each of the three affected groups. 

Current System 

To date, DEA has authorized one 

grower, the National Center for Natural 

Products Research (National Center), to 

cultivate marihuana for research. NIDA 

contracts with the National Center to 

grow marihuana from seeds supplied 

initially by NIDA for use in research 

studies.20 The National Center has 

designated a secure plot of land or 

indoor grow facility where marihuana 

crops are grown every few years, based 

on current and expected demand. The 

marihuana is grown, harvested, stored, 

and made available as bulk marihuana 

or other purified elements of marihuana 

to use for research.21 NIDA obligated 

approximately $1.5 million in Fiscal 

Year 2015 under this contract.22 This 

amount included costs unrelated to 

growing and cultivating marihuana, 

such as extracting chemical components 

and producing marihuana cigarettes and 

other marihuana-related material. 

However, based on recent discussion 

with NIDA,23 DEA estimates NIDA’s 

expenses under the contract with the 

National Center (and any related 

subcontracts) for the bulk marihuana for 

2019 were approximately $2.9 

million.24 The $2.9 million includes 

compensation for the cultivating and the 

2019 manufacturing quota (MQ) of 2,000 

kgs for NIDA (National Center) as well 

as all other duties required in the 

contract.25

Researchers may obtain marihuana for 

use in research through NIDA’s DSP. 

Bulk marihuana plant material 

produced under the NIDA DSP is 

currently available at no cost to research 

investigators supported by a NIH grant. 

Marihuana is also available to research 

investigators who are funded through 

non-Federal sources. Although NIDA 

considered charging for marihuana on a 

‘‘cost-reimbursement basis,’’ 26 the 

current policy is to provide the 

marihuana at no charge.27

Changes to Growers 

Upon promulgation of this rule, DEA 

anticipates approving more than one 


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28Applications to Become Registered Under the 

Controlled Substances Act to Manufacture 

Marijuana to Supply Researchers in the United 

States, 81 FR 53846 (Aug. 12, 2016). This rule 

supersedes the 2016 policy statement. 

29 21 CFR 1303.11(a). 

30The phrase ‘‘multiple growers’’ includes the 

possibility that the current grower is one of 

‘‘multiple growers.’’ 

31 DEA’s loaded hourly rate of a Special Agent is 

$103.54. Assuming 10 hours each (full work-day) 

for two agents, the total labor cost associated with 

collection from a registered manufacturer is $2,071. 

‘‘Loaded hourly rate’’ includes wages, benefits, and 

‘‘loading’’ of ‘‘non-productive’’ hours, i.e., leave, 

training, travel, etc. 

32 $116 is based on Internal Revenue Service 

standard mileage rates for 2019 of $0.58 per mile 

Continued 

entity to cultivate and harvest bulk 

marihuana. As explained earlier in this 

document, the CSA imposes limitations 

on the number of registrations that DEA 

may issue to bulk manufacturers of a 

given schedule I or II controlled 

substance. In addition, in deciding 

whether to grant an application for any 

such registration, the CSA requires DEA 

to consider the other public interest 

factors of 21 U.S.C. 823(a), which must 

be evaluated on an applicant-byapplicant basis. Further, DEA cannot 

accurately predict in advance which 

particular applications will be granted, 

or how many. Accordingly, DEA is 

unable to accurately estimate the 

number of registered bulk marihuana 

growers. As a result, to allow for this 

analysis, DEA estimated the economic 

impact of this rule under two different 

hypothetical scenarios, the first in 

which the number of growers expands 

to three growers, and the second in 

which the number of growers expands 

to 15 growers. It should be understood 

that this range of potential registrants is 

not necessarily reflective of the actual 

number of applications that DEA will 

grant. 

In 2016, DEA issued a policy 

statement regarding applications to 

become registered to manufacture 

marihuana to supply research.28 Since 

the publication of the 2016 policy 

statement, DEA has received 

approximately 38 pending applications 

for registration as bulk manufacturer of 

marihuana for research. As indicated 

above, the CSA requires DEA to limit 

the total number of registered bulk 

manufacturers of a given schedule I or 

II controlled substance to that necessary 

to produce an adequate and 

uninterrupted supply under adequately 

competitive conditions. Therefore, DEA 

believes a range of three to 15 growers 

is a reasonable estimate for purposes of 

this economic analysis, with the 

understanding that the actual number 

could vary considerably. 

The APQ, which includes the MQ, 

represents the annual quantity of 

marihuana that is necessary for the 

estimated medical, scientific, research 

and industrial needs of the United 

States, for lawful export requirements, 

and for the establishment and 

maintenance of reserve stocks.29

Therefore, given a constant MQ, if more 

growers are approved to produce bulk 

marihuana, the quantities of bulk 

marihuana produced and the cost of 

production (and the reimbursement of 

production cost through sales) is 

transferred from the single incumbent 

grower to new growers. This means that 

there is only a transfer of economic 

activity rather than any new cost. The 

estimated economic activity of $2.9 

million is transferred from the existing 

single grower to multiple growers.30

Transitioning from one large grower 

to multiple growers may introduce 

inefficiencies, driving up production or 

facility costs. Some growers may 

introduce more costly growing 

techniques to produce certain traits. 

Alternatively, some growers may 

introduce more efficient growing 

methods, driving down costs. 

Additionally, having more growers may 

spur more demand in bulk marihuana 

for research, pushing up the MQ. In 

particular, one of the goals of this new 

rule is to enhance marijuana availability 

for product development, which may 

have the effect of increasing the MQ. 

However, DEA does not have a basis to 

estimate the impact of these 

possibilities. Therefore, for the purposes 

of this analysis, DEA estimates that an 

increase in the number of approved 

growers does not impact the MQ. In 

summary, there is no new cost to 

growers. 

Changes to Authorizing Agencies—Cost 

to DEA 

DEA anticipates that there will be a 

transfer of economic activity from NIDA 

to DEA as well as several new costs as 

a result of this rule. This analysis 

should not be construed as a proposal 

to modify agency funding or funding 

sources. 

As discussed above, assuming a 

constant MQ for bulk marihuana of 

2,000 kgs, DEA estimates the cost of all 

the activities the National Center 

performs under its contract with NIDA 

and the purchase of the entire aggregate 

crop, regardless of the number of 

growers, is $2.9 million. This $2.9 

million is not a new cost; it is a transfer. 

Rather than NIDA paying the current 

single grower, DEA will pay the 

multiple new growers. In practice, DEA 

anticipates crops from multiple growers 

will be purchased at different times of 

the year, allowing funds from sales of 

earlier purchases to pay for subsequent 

purchases. Therefore, to purchase and 

distribute $2.9 million in bulk 

marihuana, a working capital of a lesser 

amount is likely needed. However, due 

to many unknowns and to be 

conservative, for the purposes of this 

analysis, the estimated transfer and 

working capital requirement is assumed 

to be $2.9 million. 

DEA anticipates incurring new costs 

associated with the following activities: 

Taking title to the crops and employing 

personnel to administer the program. 

The growers, purchasers, and DEA will 

already understand, prior to growing 

and harvesting, the quantities of 

marihuana to be distributed and to 

whom the distribution will be made, 

because the bona fide supply 

agreements presented during the 

registration application process will 

provide such information. In most 

instances, DEA is expected to purchase 

and take title to the crop, then sell and 

distribute the crop to the purchaser on 

the same day at the grower’s registered 

location. For the purposes of this 

analysis, DEA assumes the following 

process: 

1. After marihuana is harvested and 

prepared for delivery to DEA, the 

registered manufacturer will contact 

DEA to inform it that the marihuana is 

ready for collection. 

2. Within a reasonable timeframe, but 

in no event later than four months after 

the harvest, DEA will purchase and take 

title to the marihuana. Two DEA Special 

Agents from the nearest local DEA field 

office will drive an estimated 100 miles 

(200 miles roundtrip) to the registered 

manufacturer to take title. Any 

marihuana that is not immediately 

distributed is stored in a designated 

secure storage mechanism at the 

grower’s registered location for later 

distribution. The number of trips by the 

two DEA Special Agents equals the 

number of harvests. 

3. For marihuana distributed from 

storage at the grower’s registered 

location, the grower distributes 

marihuana on DEA’s behalf. If DEA 

deems it necessary to be present at such 

distribution, the distribution is 

scheduled to coincide with DEA’s visit 

to take title to the next crop, requiring 

no additional trips by DEA to the 

grower. 

4. Each grower has three harvests, 

requiring DEA to collect three times per 

year per grower. 

For each collection, DEA estimates 

$2,071 of labor cost 31 and $116 of 

vehicle cost 32 for a total of $2,187 per 


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multiplied by the estimated 200 miles driven, 

roundtrip. 

33 In the NPRM, DEA estimated personnel 

requirements to administer the program was one 

DEA Diversion Investigator and two Professional/ 

Administrative personnel. After further review, 

DEA has estimated in this final rule that two DEA 

Diversion Investigators and one Professional/ 

Administrative personnel are needed to administer 

the program. The two Diversion Investigators are 

needed to provide adequate oversight of reporting 

and recordkeeping requirements associated with 

distribution. 

collection. DEA understands that some 

growers, employing certain growing 

methods, may have more harvests per 

year. However, DEA does not have a 

basis to estimate these growers’ methods 

or the number of harvests per year. 

Therefore, DEA believes three harvests 

per year is a reasonable estimate. 

Assuming three collections per year per 

grower, there would be nine collections 

with three approved growers and 45 

collections with 15 approved growers. 

Applying the estimated cost of $2,187 

per collection, DEA estimates a 

transport cost of $19,683 and $98,415 

for scenarios with three and 15 growers, 

respectively. 

Additionally, DEA anticipates it will 

need additional personnel resources to 

operate this program. There are many 

unknowns and no decisions have been 

made on hiring. However, for the 

purposes of this analysis, DEA estimates 

three full-time-equivalent (FTE) 

professional staff in the Diversion 

Control Division will be needed, 

consisting of two FTE diversion 

investigator (DI), and one FTE 

professional/administrative (PA) 

resources. 

Applying the fully loaded annual cost 

of $211,981 per DI and $168,307 per PA, 

the estimated total cost of the three FTE 

employees is $592,269. For the purposes 

of this analysis, this cost does not vary 

with the number of growers. Table 1 

below summarizes the costs associated 

with increased staffing. 

TABLE 1—COST OF PERSONNEL RESOURCES

Position Job category 

Modular 

cost/unit 

cost 

($) 

Number 

of FTEs 

Cost 

($) 

Staff Coordinator ..................................................................................... DI ....................... 211,981 .............. 2 423,962 

Program Analyst ...................................................................................... PA ...................... 168,307 .............. 1 168,307 

Total ................................................................................................. N/A ..................... N/A ..................... 3 592,269 

In summary the estimated cost to DEA 

is: 

• $19,683 or $98,415 per year to 

purchase and take title to the bulk 

marihuana for scenarios with 3 or 15 

authorized growers, respectively; 

• $592,269 per year for three DEA 

FTE employees; 

• The estimated total annual cost is 

$611,952 with three growers and 

$690,684 with 15 growers and no 

offsetting cost savings at NIDA. Using 

the average of the two values, the 

estimated cost to DEA is $651,318. 

Table 2 summarizes the costs. 

TABLE 2—DEA COST SUMMARY

Low 

($) 

High 

($) 

Average 

($) 

Transport Cost ............................................................................................................................. 19,683 98,415 N/A 

Personnel Cost ............................................................................................................................ 592,269 592,269 N/A 

Total Cost ............................................................................................................................. 611,952 690,684 651,318 

Changes Affecting Researchers 

DEA anticipates minimal procedural 

change for authorized researchers who 

plan to acquire bulk marihuana for 

research. The only anticipated 

procedural change is that some 

researchers will acquire the bulk 

marihuana from DEA, rather than from 

NIDA. As discussed earlier, the only 

new cost associated with this regulation 

is the cost to DEA of $651,318, an 

average of high and low scenarios, 

which will be recovered by adding an 

administrative fee of $326 per kg. The 

administrative fee was updated from 

$304 per kg in the NPRM to $326 per 

kg in this final rule because there is a 

change in the personnel required to 

administer the program.33 As discussed 

earlier, the administrative fee will be 

adjusted annually. 

While the purchaser will purchase 

marihuana from DEA, this rule does not 

in any way affect the purchaser’s source 

of funds to purchase from DEA. If 

marihuana for research is funded by a 

third party, the researcher may not 

experience any cost increase. In 

particular, NIH has long served as a 

third-party funder for research through 

grants, including grants to researchers 

studying marihuana. Nothing in this 

rule prohibits NIH from continuing to 

fund such research by continuing to 

cover the cost of marihuana materials 

used in research, via grants to 

researchers. 

Cost Summary 

DEA estimates the cost of producing 

the 2019 MQ for bulk marihuana of 

2,000 kgs and operating NIDA’s 

marihuana DSP is $2.9 million per year. 

Under the rule, DEA anticipates more 

bulk marihuana producers will be 

approved. DEA estimates the $2.9 

million in economic activity will be 

transferred across multiple growers, 

without introducing new costs. 

DEA’s purchase of bulk marihuana is 

not a new cost (to the economy); it is a 

transfer from NIDA to DEA. However, 

$611,952 to $690,684 in operating costs 

will be incurred by DEA. DEA will 

recover the costs of carrying out the new 

aspects of the diversion control program 

relating to marihuana by selling the 

marihuana to the buyer at the negotiated 


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34Production, Analysis, and Distribution of 

Cannabis and Related Materials, Federal Business 

Opportunities (Apr. 12, 2015), https://www.fbo.gov/ 

spg/HHS/NIH/NIDA-01/N01DA-15-7793/ 

listing.html. 

35NIDA’s Role in Providing Marijuana for 

Research, National Institute on Drug Abuse, https:// 

www.drugabuse.gov/drugs-abuse/marijuana/nidasrole-in-providing-marijuana-research. 

36Estimated spending for the marihuana DSP for 

2019 was $3.3 million to $3.4 million, of which 10 

percent to 15 percent meet the definition of ‘‘hemp’’ 

under the provisions of the AIA. Using the 

midpoint of these ranges, the estimated spending is 

$2.9 million. The figures are based on a general 

discussion, and actual figures may differ. 

37The 2019 APQ for all manufacturers of 

marihuana is 2,450 kgs. 2,000 kgs are for cultivating 

and manufacturing of bulk marihuana. See 83 FR 

67348. 

sale price, between the grower and the 

buyer, plus the administrative fee 

assessed on a per kg basis. 

The net present values (NPV) of the 

low cost estimate of $611,952 per year 

over 10 years are $5.2 million and $4.3 

million at a three percent discount rate 

and seven percent discount rate, 

respectively. The NPVs of the high cost 

estimate of $690,684 over 10 years are 

$5.9 million and $4.9 million at a three 

percent discount rate and seven percent 

discount rate, respectively. The average 

of the estimated low and high costs is 

$651,318. The NPVs of the average of 

$651,318 over 10 years are $5.6 million 

and $4.6 million at three percent and 

seven percent discount rates, 

respectively. Table 3 summarizes the 

estimated annual effect and NPVs 

calculation for each of the transfers and 

the three scenarios. 

TABLE 3—SUMMARY OF ANNUAL EFFECT AND NPVS

Annual effect 

($) 

NPVs at 3% 

($M) 

NPVs at 7% 

($M) 

Cost (Low) ................................................................................................................................... 611,952 5.2 4.3 

Cost (Average) ............................................................................................................................. 651,318 5.6 4.6 

Cost (High) ................................................................................................................................... 690,684 5.9 4.9 

Executive Order 13771 (Reducing 

Regulation and Controlling Regulatory 

Costs) 

This rule is a deregulatory action for 

the purposes of Executive Order 13771. 

The rule is an enabling rule which, 

coincidentally with other provisions, 

expands the number of authorized bulk 

marihuana growers. 

Executive Order 12988 (Civil Justice 

Reform) 

This rule meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to eliminate ambiguity, 

minimize litigation, establish clear legal 

standards, and reduce burdens on 

regulated parties and the court system. 

Executive Order 13132 (Federalism) 

This rule does not have federalism 

implications warranting the application 

of Executive Order 13132. The rule does 

not have substantial direct effects on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. 

Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

This rule does not have tribal 

implications warranting the application 

of Executive Order 13175. It does not 

have substantial direct effects on one or 

more Indian tribes, on the relationship 

between the Federal government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal government and Indian tribes. 

Regulatory Flexibility Act 

In accordance with the Regulatory 

Flexibility Act (RFA), DEA evaluated 

the impact of this rule on small entities. 

DEA’s evaluation of economic impact by 

size category indicates that the rule will 

not, if promulgated, have a significant 

economic impact on a substantial 

number of these small entities. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities unless the agency can certify 

that the rule will not have a significant 

impact on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. DEA 

evaluated the impact of this rule on 

small entities and a discussion of its 

findings is below. 

As discussed in the section of this 

rulemaking relating to Executive Orders 

12866, 13565, and 13771, this rule 

amends the provisions of the regulations 

governing applications by persons 

seeking to become registered with DEA 

to grow marihuana as bulk 

manufacturers, and adds provisions 

related to the purchase and sale of this 

marihuana by DEA. Upon promulgation 

of this rule, the following key changes 

are anticipated: More persons will be 

authorized to grow marihuana; DEA will 

purchase and take physical possession 

of crops; and DEA will, with respect to 

marihuana, have the exclusive right of 

importing, exporting, wholesale trading, 

and maintaining stocks. These changes, 

as explained above, mean that 

authorized purchasers of bulk 

marihuana may only purchase from 

DEA, except that DEA’s exclusive right 

will not extend to medicinal cannabis or 

cannabis preparations as these terms are 

defined in paragraphs (b) and (c), 

respectively, of § 1318.02 of this rule. 

The changes described above affect 

three primary groups of entities: 

Growers and prospective growers, the 

authorizing agencies (including NIDA 

and DEA), and purchasers (generally 

researchers). Because any economic 

impact on Federal agencies is outside 

the scope of the RFA, the transfer of 

economic activity between the agencies 

is excluded from this discussion. To 

examine the impact of the rule, DEA 

first reviewed the current system for 

growing and distributing bulk 

marihuana, then examined the impact 

on each of the two affected non-Federal 

groups: Growers (bulk manufacturers of 

marihuana) and researchers. 

Current System 

To date, DEA has authorized one 

grower, the National Center, to cultivate 

marihuana for research. NIDA contracts 

with the National Center to grow 

marihuana for use in research studies.34

The National Center designates a secure 

plot of land where marihuana crops are 

grown every few years, based on current 

and expected demand. The marihuana 

is grown, harvested, stored, and made 

available as bulk marihuana or other 

purified elements of marihuana to use 

for research.35 As explained previously, 

DEA estimates NIDA’s expenses under 

the contract with the National Center 

(and any related subcontracts) for the 

bulk marihuana for 2019 were 

approximately $2.9 million.36 The $2.9 

million includes compensation for the 

cultivating and the 2019 MQ of 2,000 

kgs for NIDA as well as all other duties 

required in the contract.37


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38Marijuana Plant Material Available from the 

NIDA Drug Supply Program, National Institute on 

Drug Abuse, https://www.drugabuse.gov/research/ 

research-data-measures-resources/nida-drugsupply-program/marijuana-plant-materialavailable-nida-drug-supply-program. 

39See note 23. 

40Applications to Become Registered under the 

Controlled Substances Act to Manufacture 

Marijuana to Supply Researchers in the United 

States, 81 FR 53846 (2016). This rule supersedes the 

2016 policy statement. 

41 21 U.S.C. 826(a). 

42The phrase ‘‘multiple growers’’ includes the 

possibility that the current grower is one of the 

‘‘multiple growers.’’ 

43Conference call between DEA Regulatory 

Drafting and Policy Support section and members 

of NIDA’s Marijuana Drug Supply Program, July 30, 

2019. 

44For the purposes of this analysis, the term 

‘‘firms’’ is synonymous with ‘‘entities.’’ 

45 2015 SUSB Annual Datasets by Establishment 

Industry, U.S. & States, NAICS, Detailed 

Employment Sizes (U.S., 6-digit and States, NAICS 

Sectors), United States Census Bureau, https://

www.census.gov/data/datasets/2015/econ/susb/ 

2015-susb.html. 

46 Ibid. 

47Table of Small Business Size Standards 

Matched to North American Industry Classification 

System Codes, United States Small Business 

Association (Oct. 1, 2017). The NAICS code was 

updated for ‘Research and Development in the 

Physical, Engineering, and Life Sciences (except 

Biotechnology)’ from 541712 to 541715. The 2015 

SUSB data uses 541712 and the 2017 SBA size 

standard uses 541715 for the same industry. 

Researchers may obtain marihuana for 

use in research through NIDA’s DSP. 

Bulk marihuana plant material 

produced under the NIDA DSP is 

available at no cost to research 

investigators who are supported by an 

NIH grant. Marihuana is also available 

to research investigators who are funded 

through non-Federal sources. Although 

NIDA considered charging for 

marihuana on a ‘‘cost-reimbursement 

basis,’’ 38 the current policy is to provide 

the marihuana at no charge.39

Impact on Growers 

Upon promulgation of this rule, DEA 

anticipates approving more than one 

person to cultivate and harvest bulk 

marihuana. In 2016, DEA issued a 

policy statement regarding applications 

to become registered to manufacture 

marihuana to supply research.40 Since 

the publication of the 2016 policy 

statement, there are approximately 38 

pending applications for registration as 

bulk manufacturer of marihuana for 

research. Additionally, some applicants 

may not meet the statutory and 

regulatory criteria for holding a 

registration as a bulk manufacture and 

will be denied. Therefore, for the 

purposes of this analysis, DEA will 

estimate the economic impact of this 

rule at three and 15 growers with the 

understanding that the actual number 

could vary considerably. 

The APQ, which includes the MQ, 

represents the annual quantity of 

marihuana that is necessary for the 

estimated medical, scientific, research 

and industrial needs of the United 

States, for lawful export requirements, 

and for the establishment and 

maintenance of reserve stocks.41

Therefore, given a constant MQ, if more 

growers are approved to produce bulk 

marihuana, the quantities of bulk 

marihuana produced and the cost of 

production (and reimbursement of their 

production cost through sales) is 

transferred from the incumbent grower 

to new growers. This means that there 

is no new cost; instead, there is only a 

transfer of economic activity. The 

estimated economic activity of $2.9 

million is transferred from the existing 

single grower to multiple growers.42

Transitioning from one large grower 

to multiple smaller growers may reduce 

production efficiency, driving up cost. 

Some growers may introduce more 

costly growing techniques in order to 

produce certain traits. Alternatively, 

some growers may introduce more 

efficient growing methods, driving 

down cost. Additionally, having more 

growers may spur more demand in bulk 

marihuana for research, pushing up the 

MQ. However, DEA does not have a 

basis to estimate the impact of these 

possibilities. 

Impact on Researchers 

DEA anticipates minimal procedural 

change for authorized researchers who 

plan to acquire bulk marihuana for 

research. The only anticipated 

procedural change is that the researcher 

will acquire the bulk marihuana from 

DEA, rather than from NIDA or the 

National Center. As discussed earlier, 

the only new cost associated with this 

regulation is the cost to DEA of 

$651,318, which will be recovered by 

adding an administrative fee of $326 per 

kg. As discussed earlier, the 

administrative fee will be adjusted 

annually. While purchasers will 

purchase marihuana from DEA, this rule 

does not in any way affect the 

purchasers’ source of funds to purchase 

from DEA. If marihuana for research is 

funded by a third party, the researcher 

may not experience any cost increase. 

Affected Number of Small Entities 

This rule affects the current and 

prospective bulk manufacturers of 

marihuana for research and researchers. 

Based on the discussion above, DEA 

anticipates up to 15 bulk manufacturers 

are affected by this rule. Additionally, 

based on a discussion with NIDA,43

DEA estimates 40 researchers are 

affected by this rule. The 40 researchers 

represent the approximate number of 

researchers that receive marihuana from 

NIDA’s marihuana DSP. 

Based on a review of representative 

North American Industry Classification 

System (NAICS) codes for bulk 

manufacturers and researchers, the 

following number of firms may be 

affected: 44

• 421 firms related to ‘Medicinal and 

Botanical Manufacturing’ (325411) 45

• 9,634 firms related to ‘Research and 

Development in the Physical, 

Engineering, and Life Sciences (except 

Biotechnology)’ (541712) 46

The United States Small Business 

Administration (SBA) sets size 

standards that determine how large an 

entity can be and still qualify as a small 

business for Federal government 

programs. For the most part, size 

standards are based on the average 

annual receipts or the average number 

of employees of a firm. The SBA size 

standard for both industries identified 

by the NAICS codes above is 1,000 

employees.47

Comparing the SBA size standards to 

the U.S. Census Bureau, Statistics of 

U.S. Businesses (SUSB) detailed data on 

establishment size by NAICS code for 

each affected industry, DEA estimates 

the following number of small entities 

and percent of firms that are small 

entities by industry: 

• 392 (93.1 percent of total) firms in 

the area of ‘Medicinal and Botanical 

Manufacturing’ (325411) 

• 9,090 (94.4 percent of total) firms in 

the area of ‘Research and Development 

in the Physical, Engineering, and Life 

Sciences (except Biotechnology)’ 

(541712) 

Table 4 details the calculation for the 

number of small entities by industry. 


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TABLE 4—NUMBER OF SMALL ENTITIES BY INDUSTRY

NAICS description 

Firm size 

by average 

employees 

Firms SBA size 

standard 

Small 

entities 

% small 

entities 

325411—Medicinal and Botanical Manufacturing ........................ <500 ................. 384 1,000 384 100 

500–749 ........... 3 3 100 

750–999 ........... 5 5 100 

1,000–1,499 ..... 6 .................... 0 

1,500–1,999 ..... 2 .................... 0 

2,000–2,499 ..... 1 .................... 0 

2,500–4,999 ..... 7 .................... 0 

5,000+ .............. 13 .................... 0 

Total .......... 421 392 93.1 

541712—Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).<500 .................

500–749 ...........

8,972 

68 

1,000 8,972 

68 

100 

100 

750–999 ........... 50 50 100 

1,000–1,499 ..... 70 .................... 0 

1,500–1,999 ..... 40 .................... 0 

2,000–2,499 ..... 35 .................... 0 

2,500–4,999 ..... 132 .................... 0 

5,000+ .............. 267 .................... 0 

Total .......... 9,634 9,090 94.4 

Applying the calculated respective 

percentage for small entities to the 

number of affected bulk manufacturers 

and researchers, DEA estimates 14 (15 × 

93.1 percent) bulk manufacturers and 38 

(40 × 94.4 percent) researchers, for a 

total of 52 small entities, will be affected 

by this rule. The 14 affected small entity 

bulk manufacturers represent four 

percent of the estimated 392 small 

entities in the ‘Medicinal and Botanical 

Manufacturing’ (325412) industry, and 

the 38 affected small entity researchers 

represent 0.4 percent of the estimated 

9,090 small entities in the ‘Research and 

Development in the Physical, 

Engineering, and Life Sciences (except 

Biotechnology)’ (541712) industry. 

Table 5 summarizes the calculations for 

the percentage of small entities that are 

affected by the rule. 

TABLE 5—PERCENT OF SMALL ENTITIES AFFECTED BY INDUSTRY

NAICS description Number 

of firms 

SBA size 

standard 

Estimated 

number of 

small entities 

Estimated 

number of 

affected small 

entities 

Percentage of 

small entities 

affected 

325411—Medicinal and Botanical Manufacturing ......... 421 1,000 392 14 4 

541712—Research and Development in the Physical, 

Engineering, and Life Sciences (except Biotechnology) ................................................................. 9,634 1,000 9,090 38 0.4 

Total ........................................................................ 10,055 N/A 9,482 52 N/A 

DEA generally uses a threshold of 30 

percent as a ‘‘substantial’’ number of 

affected small entities. Thus, the above 

analysis reveals that a non-substantial 

amount of small bulk manufacturer 

entities (4 percent) and of small 

researcher entities (0.4 percent) will be 

affected by this rule. DEA generally considers impacts that 

are greater than three percent of annual 

revenue to be a ‘‘significant economic 

impact’’ on an entity. As discussed 

earlier, DEA estimates that there will be 

a new cost to DEA of $611,952 to 

$690,684 per year, or the average of the 

high and low estimates of $651,318 per 

year. DEA will recover the costs of 

carrying out the new aspects of the 

diversion control program relating to 

marihuana by selling the marihuana to 

the buyer at the negotiated sale price, 

between the grower and the buyer, plus 

the administrative fee assessed on a per 

kg basis. Based on the average of the 

high and low estimates of $651,318 and 

MQ of 2,000 kgs, the administrative fee 

is $326 per kg, adjusted annually. Furthermore, NIH-funded or other 

third-party funded researchers are likely 

to request and receive enough funding 

for the full price of marihuana, 

including the administrative fee. There 

will be no impact to these researchers. 

However, DEA does not have sufficient 

information to estimate the number of 

small entity researchers that will fall 

under this category. Although DEA is 

unable to quantify the economic impact 

for the estimated 14 small entity bulk 

manufacturers and 38 small entity 

researchers, the number of affected 

small entity manufacturers and 

researchers is not a substantial number 

of small entities in their respective 

industries. 

Based on the analysis above, and 

because of these facts, DEA believes this 

rule, if promulgated, will not have a 

significant economic impact on a 

substantial number of small entities. 

Unfunded Mandates Reform Act of 1995 

In accordance with the Unfunded 

Mandates Reform Act of 1995 (UMRA), 

2 U.S.C. 1501 et seq., DEA has 

determined that this action will not 

result in any Federal mandate that may 

result ‘‘in the expenditure by State, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 

$100,000,000 or more (adjusted 

annually for inflation) in any 1 year.’’ 

See 2 U.S.C. 1532(a). Therefore, neither 


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a Small Government Agency Plan nor 

any other action is required under the 

UMRA. 

Paperwork Reduction Act of 1995 

Pursuant to the Paperwork Reduction 

Act of 1995 (PRA), 44 U.S.C. 3501–3521, 

DEA is revising existing information 

collection 1117–0012. A person is not 

required to respond to a collection of 

information unless it displays a valid 

OMB control number. Copies of existing 

information collections approved by 

OMB may be obtained at https://

www.reginfo.gov/. 

A. Collections of Information Associated 

With the Rule 

Title: Application for Registration 

(DEA Form 225); Renewal Application 

for Registration (DEA Form 225A); 

Affidavit for Chain Renewal (DEA Form 

225B). 

OMB control number: 1117–0012. 

Form numbers: DEA–225, DEA–225A, 

DEA–225B. 

Type of information collection: 

Revision of a currently approved 

collection. 

Applicable component of the 

department sponsoring the collection: 

Department of Justice/Drug Enforcement 

Administration, Diversion Control 

Division. 

Affected public who will be asked or 

required to respond: Business or other 

for-profit. 

Abstract: The Controlled Substances 

Act requires all businesses and 

individuals who manufacture, 

distribute, import, export, or conduct 

research and laboratory analysis with 

controlled substances to register with 

DEA. 21 U.S.C. 822; 21 CFR 1301.11, 

1301.13. Registration is a necessary 

control measure that helps to detect and 

prevent diversion by ensuring that the 

closed system of distribution of 

controlled substances can be monitored 

by DEA, and that the businesses and 

individuals handling controlled 

substances are accountable. 

This rule amends the regulations 

governing applications by persons 

seeking to become registered with DEA 

to grow marihuana as bulk 

manufacturers and adds provisions 

related to the purchase and sale of this 

marihuana by DEA. Persons seeking to 

become registered with DEA to grow 

marihuana as bulk manufacturers will 

still apply for registration using the 

same DEA Form 225 as other bulk 

manufacturers, but there will be a new 

supplemental questionnaire unique to 

marihuana manufacturers in order to 

gather additional information about 

applicants. There will also be new 

questionnaires used for importer 

applicants and non-marihuana bulk 

manufacturer applicants. Forms 225, 

225A, and 225B will all receive minor 

revisions to improve clarity and 

usability for registrants. 

DEA estimates the following number 

of respondents and burden associated 

with this collection of information: 

• Number of respondents: 15,919. 

• Frequency of response: 1 per 

respondent per year. 

• Number of responses: 15,919. 

• Burden per response: 0.1304 hours. 

• Total annual burden in hours: 

2,076. 

If you need a copy of the proposed 

information collection instruments with 

instructions or additional information, 

please contact the Regulatory Drafting 

and Policy Support Section (DPW), 

Diversion Control Division, Drug 

Enforcement Administration; Mailing 

Address: 8701 Morrissette Drive, 

Springfield, Virginia 22152–2639; 

Telephone: (571) 362–3261. 

At this point, any comments related to 

this collection of information may be 

sent in writing to the Office of 

Information and Regulatory Affairs, 

OMB, Attention: Desk Officer for DOJ, 

Washington, DC 20503. Please state that 

your comment refers to RIN 1117– 

AB54/Docket No. DEA–506. 

Congressional Review Act 

This final rule is not a major rule as 

defined by the Congressional Review 

Act (CRA), 5 U.S.C. 804. This final rule 

will not result in an annual effect on the 

economy of $100,000,000 or more; a 

major increase in costs or prices; or 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

companies to compete with foreignbased companies in domestic and 

export markets. DEA submitted a copy 

of the final rule to both Houses of 

Congress and to the Comptroller 

General. 

National Environmental Policy Act 

DEA has analyzed the impacts of this 

Final Rule on the human environment 

pursuant to the National Environmental 

Policy Act (NEPA), 42 U.S.C. 4321 et 

seq., and has determined that it is 

categorically excluded under 28 CFR 

part 61, Appendix B. Categorical 

exclusions are actions identified in an 

agency’s NEPA implementing 

procedures that normally do not have a 

significant impact on the environment 

and therefore do not require either an 

environmental assessment (EA) or 

environmental impact statement (EIS). 

See 40 CFR 1508.4. In analyzing the 

applicability of a categorical exclusion, 

the agency must also consider whether 

extraordinary circumstances are present 

that would warrant preparation of an EA 

or EIS. This action is covered by the 

categorical exclusion for registration of 

persons authorized to handle controlled 

substances listed in 28 CFR part 61, 

Appendix B. 

List of Subjects 

21 CFR Part 1301 

Administrative practice and 

procedure, Drug traffic control, Security 

measures. 

21 CFR Part 1318 

Administrative practice and 

procedure, Drug traffic control. 

For the reasons stated in the 

preamble, DEA amends 21 CFR chapter 

II as follows: 

PART 1301—REGISTRATION OF 

MANUFACTURERS, DISTRIBUTORS, 

AND DISPENSERS OF CONTROLLED 

SUBSTANCES 

■ 1. The authority citation for part 1301 

continues to read as follows: 

Authority: 21 U.S.C. 821, 822, 823, 824, 

831, 871(b), 875, 877, 886a, 951, 952, 956, 

957, 958, 965 unless otherwise noted. 

■ 2. In § 1301.33, revise paragraph (c) 

and add paragraph (d) to read as 

follows: 

§ 1301.33 Application for bulk 

manufacture of Schedule I and II 

substances. 

* * * * * 

(c) Except as provided in paragraph 

(d) of this section, this section shall not 

apply to the manufacture of basic 

classes of controlled substances listed in 

Schedule I or II as an incident to 

research or chemical analysis as 

authorized in § 1301.13(e)(1). 

(d) An application for registration to 

manufacture marihuana that involves 

the planting, cultivating, growing, or 

harvesting of marihuana shall be subject 

to the requirements of this section and 

the additional requirements set forth in 

part 1318 of this chapter. 

■ 3. Add part 1318 to read as follows: 

PART 1318—CONTROLS TO SATISFY 

THE REQUIREMENTS OF THE ACT 

APPLICABLE TO THE 

MANUFACTURING OF MARIHUANA 

Sec. 

1318.01 Scope of this part. 

1318.02 Definitions. 

1318.03 Implementation of statutory 

requirements. 

1318.04 Specific control measures 

applicable to the bulk manufacture of 

marihuana. 


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1318.05 Application of the public interest 

factors. 

1318.06 Factors affecting prices for the 

purchase and sale by the Administration 

of cannabis. 

1318.07 Non-liability of the Drug 

Enforcement Administration. 

Authority: 21 U.S.C. 801(7), 821, 822(a)(1), 

(b), 823(a), 871(b), 886a. 

§ 1318.01 Scope of this part. 

Procedures governing the registration 

of manufacturers seeking to plant, grow, 

cultivate, or harvest marihuana are set 

forth by this part. 

§ 1318.02 Definitions. 

(a) Except as provided in paragraph 

(e) of this section, the term cannabis 

means any plant of the genus Cannabis. 

(b) Except as provided in paragraph 

(e) of this section, the term medicinal 

cannabis means a drug product made 

from the cannabis plant, or derivatives 

thereof, that can be legally marketed 

under the Federal Food, Drug, and 

Cosmetic Act. 

(c) Except as provided in paragraph 

(e) of this section, the term cannabis 

preparation means cannabis that was 

delivered to the Administration and 

subsequently converted by a registered 

manufacturer into a mixture (solid or 

liquid) containing cannabis, cannabis 

resin, or extracts of cannabis. 

(d) Except as provided in paragraph 

(e) of this section, the term cannabis 

resin means the separated resin, 

whether crude or purified, obtained 

from the cannabis plant. 

(e) As used in this part, the terms 

cannabis, medicinal cannabis, and 

cannabis preparation do not include 

any material, compound, mixture, or 

preparation that falls outside the 

definition of marihuana in section 

102(16) of the Controlled Substances 

Act (the Act) (21 U.S.C. 802(16)). 

(f) The term Single Convention means 

the Single Convention on Narcotic 

Drugs, 1961 (18 U.S.T. 1407). 

(g) The term bona fide supply 

agreement means a letter of intent, 

purchase order or contract between an 

applicant and a researcher or 

manufacturer registered under the Act. 

(h) The term registered researcher or 

manufacturer means a person registered 

under the Act to perform research or 

manufacture of marihuana in Schedule 

I. 

§ 1318.03 Implementation of statutory 

requirements. 

(a) As provided in section 303(a) of 

the Act (21 U.S.C. 823(a)), the 

Administrator may grant an application 

for a registration to manufacture 

marihuana, including the cultivation of 

cannabis, only if he determines that 

such registration is consistent with the 

public interest and with United States 

obligations under the Single 

Convention. 

(b) In accordance with section 303(a) 

of the Act and § 1301.44(a) of this 

chapter, the burden shall be on the 

applicant to demonstrate that the 

requirements for such registration have 

been satisfied. 

§ 1318.04 Specific control measures 

applicable to the bulk manufacture of 

marihuana. 

For a registration to manufacture 

marihuana that involves the cultivation 

of cannabis, the following provisions 

must be satisfied: 

(a) All registered manufacturers who 

cultivate cannabis shall deliver their 

total crops of cannabis to the 

Administration, except as provided in 

paragraph (d). The Administration shall 

purchase and take physical possession 

of such crops as soon as possible, but 

not later than four months after the end 

of the harvest. The Administration may 

accept delivery and maintain possession 

of such crops at the registered location 

of the registered manufacturer 

authorized to cultivate cannabis 

consistent with the maintenance of 

effective controls against diversion. In 

such cases, the Administration shall 

designate a secure storage mechanism at 

the registered location in which the 

Administration may maintain 

possession of the cannabis, and the 

Administration will control access to 

the stored cannabis. If the 

Administration determines that no 

suitable location exists at the registered 

location of the registered manufacturer 

authorized to cultivate cannabis, then 

the Administration shall designate a 

location for the authorized grower to 

deliver the crop as soon as possible, but 

not later than four months after the end 

of the harvest. However, in all cases the 

registrant must comply with the security 

requirements specified in part 1301 of 

this chapter. 

(b) The Administration shall, with 

respect to cannabis, have the exclusive 

right of importing, exporting, wholesale 

trading, and maintaining stocks other 

than those held by registered 

manufacturers and distributors of 

medicinal cannabis or cannabis 

preparations. Such exclusive right shall 

not extend to medicinal cannabis or 

cannabis preparations. The 

Administration may exercise its 

exclusive right by authorizing the 

performance of such activities by 

appropriately registered persons. The 

Administration shall require prior 

written notice of each proposed 

importation, exportation, or distribution 

of cannabis that specifies the quantity of 

cannabis to be imported, exported, or 

distributed and the name, address, and 

registration number of the registered 

manufacturer or researcher to receive 

the cannabis before authorizing the 

importation, exportation, or 

distribution. All importation and 

exportation shall be performed in 

compliance with part 1312 of this 

chapter, as applicable. Under no 

circumstance shall a registered 

manufacturer authorized to grow 

cannabis import, export, or distribute 

cannabis without the express written 

authorization of the Administration. 

(c) A registered manufacturer 

authorized to grow cannabis shall notify 

in writing the Administration of its 

proposed date of harvest at least 15 days 

before the commencement of the 

harvest. 

(d) A registered manufacturer 

authorized to grow cannabis may 

distribute small quantities of cannabis 

to a registered analytical lab for 

chemical analysis by such analytical lab 

prior to the Administration purchasing 

and taking physical possession of the 

crop. The cannabis delivered to the 

analytical lab under such circumstances 

need not be delivered to the 

Administration pursuant to paragraph 

(a), provided such cannabis is destroyed 

by the analytical lab upon completion of 

the testing. Any such distribution of 

cannabis by a registered manufacturer to 

a registered analytical lab must comply 

with all applicable requirements of the 

Act and this subchapter, including but 

not limited to security and 

recordkeeping requirements. 

§ 1318.05 Application of the public 

interest factors. 

(a) In accordance with section 303(a) 

of the Act (21 U.S.C. 823(a)), the 

Administrator shall consider the public 

interest factors set forth in paragraphs 

(a)(1) through (6) of this section: 

(1) Maintenance of effective controls 

against diversion of particular 

controlled substances and any 

controlled substance in schedule I or II 

compounded therefrom into other than 

legitimate medical, scientific, research, 

or industrial channels, by limiting the 

importation and bulk manufacture of 

such controlled substances to a number 

of establishments which can produce an 

adequate and uninterrupted supply of 

these substances under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes; 

(2) Compliance with applicable State 

and local law; 

(3) Promotion of technical advances 

in the art of manufacturing these 


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82354 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 

substances and the development of new 

substances; 

(4) Prior conviction record of 

applicant under Federal and State laws 

relating to the manufacture, 

distribution, or dispensing of such 

substances; 

(5) Past experience in the manufacture 

of controlled substances, and the 

existence in the establishment of 

effective control against diversion; and 

(6) Such other factors as may be 

relevant to and consistent with the 

public health and safety. 

(b) The Administrator’s determination 

of which applicants to select will be 

consistent with the public interest 

factors set forth in section 303(a), with 

particular emphasis on the following 

criteria: 

(1) Whether the applicant has 

demonstrated prior compliance with the 

Act and this chapter; 

(2) The applicant’s ability to 

consistently produce and supply 

cannabis of a high quality and defined 

chemical composition; and 

(3)(i) In determining under section 

303(a)(1) of the Act (21 U.S.C. 823(a)(1)) 

the number of qualified applicants 

necessary to produce an adequate and 

uninterrupted supply of cannabis under 

adequately competitive conditions, the 

Administrator shall place particular 

emphasis on the extent to which any 

applicant is able to supply cannabis or 

its derivatives in quantities and varieties 

that will satisfy the anticipated demand 

of researchers and other registrants in 

the United States who wish to obtain 

cannabis to conduct activities 

permissible under the Act, as 

demonstrated through a bona fide 

supply agreement with a registered 

researcher or manufacturer as defined in 

this subpart. 

(ii) If an applicant seeks registration to 

grow cannabis for its own research or 

product development, the applicant 

must possess registration as a schedule 

I researcher with respect to marihuana 

under § 1301.32 of this chapter. As 

specified in § 1301.13 of this chapter, 

chemical analysis and preclinical 

research (including quality control 

analysis) are not coincident activities of 

a manufacturing registration for 

schedule I substances, including 

cannabis. In determining under section 

303(a)(1) of the Act (21 U.S.C. 823(a)(1)) 

the number of qualified applicants 

necessary to produce an adequate and 

uninterrupted supply of cannabis under 

adequately competitive conditions, the 

Administrator shall consider the 

holding of an approved marihuana 

research protocol by a registered 

schedule I researcher seeking to grow 

cannabis for its own research or product 

development as evidence of the 

necessity of the applicant’s registration 

under this factor. 

(c) Applications accepted for filing 

after January 19, 2021 will not be 

considered pending for purposes of 

paragraph (a) of this section until all 

applications accepted for filing on or 

before January 19, 2021 have been 

granted or denied by the Administrator. 

Where an application is subject to 

section 303(i) of the Act (21 U.S.C. 

823(i)), that section shall apply in lieu 

of this paragraph (c). 

(d) In determining the legitimate 

demand for cannabis and its derivatives 

in the United States, the Administrator 

shall consult with the U.S. Department 

of Health and Human Services, 

including its components. 

§ 1318.06 Factors affecting prices for the 

purchase and sale by the Administration of 

cannabis. 

(a) In accordance with section 

111(b)(3) of Public Law 102–395 (21 

U.S.C. 886a(1)(C)), seeking to recover 

the full costs of operating the aspects of 

the diversion control program that are 

related to issuing registrations that 

comply with the Controlled Substances 

Act, the Administration shall assess an 

administrative fee. To set the 

administrative fee, the Administration 

shall annually determine the preceding 

fiscal year’s cost of operating the 

program to cultivate cannabis and shall 

divide the prior fiscal year’s cost by the 

number of kgs of cannabis authorized to 

be manufactured in the current year’s 

quota to arrive at the administrative fee 

per kg. The administrative fee per kg 

shall be added to the sale price of 

cannabis purchased from the 

Administration. The administrative fee 

shall be paid to the Diversion Control 

Fee Account. 

(b) As set forth in § 1318.04, the 

Administration shall have the exclusive 

right of, among other things, wholesale 

trading in cannabis that it purchases 

from registered manufacturers. The 

Administration will, therefore, buy from 

such manufacturer, sell cannabis to 

registered researchers and 

manufacturers, and establish prices for 

such purchase and sale. The 

Administration will set such prices in 

the following manner: 

(1) Bulk growers of cannabis shall 

negotiate directly with registered 

researchers and manufacturers 

authorized to handle cannabis to 

determine a sale price for their 

cannabis. Upon entering into a contract 

for the provision of bulk cannabis and 

prior to the exchange of cannabis, the 

parties shall pay to the Administration 

an administrative fee assessed based on 

the number of kgs to be supplied. The 

administrative fee shall not be 

recoverable in the event that delivery is 

rejected by the buyer. 

(2) The Administration shall sell the 

cannabis to the buyer at the negotiated 

sale price plus the administrative fee 

assessed on a per kg basis. Prior to the 

purchase of the cannabis by the 

Administration, the buyer shall pay the 

negotiated purchase price and 

administrative fee to the 

Administration. The Administration 

shall hold funds equal to the purchase 

price in escrow until the delivery of the 

cannabis by the grower to the 

Administration. The administrative fee 

shall not be recoverable in the event that 

delivery is rejected by the buyer. 

(3) After receiving the purchase price 

and administrative fee from the buyer, 

the Administration shall purchase the 

cannabis from the grower, on behalf of 

the buyer, at the negotiated sale price. 

The Administration shall retain the 

administrative fee. In the event the 

buyer fails to pay the purchase price 

and the administrative fee, the 

Administration shall have no obligation 

to purchase the crop and may order the 

grower to destroy the crop if the grower 

cannot find an alternative buyer within 

four months of harvest. 

(4) In instances where the grower of 

the cannabis is the same entity as the 

buyer of the cannabis, or a related or 

subsidiary entity, the entity may 

establish a nominal price for the 

purchase of the cannabis. The 

Administration shall then purchase the 

entity’s cannabis at that price and sell 

the cannabis back to the entity, or a 

related or subsidiary entity, at the same 

price with the addition of the 

administrative fee. 

(c) Administrative fees set in 

accordance with this part will be made 

available, on an updated basis, on the 

Administration’s website, no later than 

December 15th of the year preceding the 

year in which the administrative fee 

will be collected. 

(d) Nothing in this section shall 

prohibit the U.S. Department of Health 

and Human Services from continuing to 

fund the acquisition of cannabis for use 

in research by paying, directly or 

indirectly, the purchase cost and 

administrative fee to the 

Administration. 

§ 1318.07 Non-liability of Drug 

Enforcement Administration. 

The Administration shall have no 

liability with respect to the performance 

of any contractual terms agreed to by a 

grower and buyer of bulk cannabis, 

including but not limited to the quality 

of any cannabis delivered to a buyer. In 


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Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Rules and Regulations 82355 

the event that a buyer deems the 

delivered cannabis to be defective, the 

buyer’s sole remedy for damages shall 

be against the grower and not the 

Administration. 

Timothy J. Shea, 

Acting Administrator. 

[FR Doc. 2020–27999 Filed 12–17–20; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9925] 

RIN 1545–BP23 

Meals and Entertainment Expenses 

Under Section 274; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations; correction. 

SUMMARY: This document contains 

corrections to the final regulations 

(Treasury Decision 9925) that published 

in the Federal Register on October 9, 

2020. The final regulations provide 

guidance under section 274 of the 

Internal Revenue Code (Code) regarding 

certain recent amendments made to that 

section. Specifically, the final 

regulations address the elimination of 

the deduction under section 274 for 

expenditures related to entertainment, 

amusement, or recreation activities, and 

provide guidance to determine whether 

an activity is of a type generally 

considered to be entertainment. 

DATES: These corrections are effective 

on December 18, 2020 and applicable 

for taxable years that begin on or after 

October 9, 2020. 

FOR FURTHER INFORMATION CONTACT: 

Patrick Clinton of the Office of the 

Associate Chief Counsel (Income Tax 

and Accounting), (202) 317–7005 (not 

toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The final regulations (TD 9925) that 

are the subject of this correction are 

issued under section 274 of the Internal 

Revenue Code. 

Need for Correction 

As published the final regulations (TD 

9925) contain errors that need to be 

corrected. 

Correction of Publication 

Accordingly, the final regulations (TD 

9925), that are the subject of FR Doc. 

2020–21990, published on October 9, 

2020 (85 FR 64026), are corrected as 

follows: 

1. On page 64031, third column, the 

second line, the language ‘‘in 

Sutherland Lumber’’ is corrected to read 

‘‘in Sutherland Lumber-Southwest’’. 

2. On page 64031, third column, the 

ninth line of the second full paragraph, 

the language ‘‘§ 1.274–10(a)(2)(ii)(C)(2)’’ 

is corrected to read ‘‘§ 1.274– 

10(a)(2)(ii)(C)(2)’’. 

3. On page 64032, second column, the 

second line, the language ‘‘or gross 

income is zero, whether zero is’’ is 

corrected to read ‘‘or gross income is 

zero (other than due to a reimbursement 

by the recipient), whether zero is’’. 

4. On page 64032, second column, the 

thirteenth line from the top of the page, 

the language ‘‘(e)(9) do not apply.’’ is 

corrected to read ‘‘(e)(9) generally do not 

apply.’’. 

5. On page 64032, second column, the 

thirteenth line from the top of the page, 

the language ‘‘Similarly, the exceptions 

in section 274(e)(2) and (e)(9) do not 

apply if’’ is corrected to read ‘‘However, 

the exceptions in section 274(e)(2) and 

(e)(9) will apply if the recipient 

reimburses the taxpayer for a portion of 

the value of the food or beverages even 

if the value exceeding the reimbursed 

amount is properly excluded from the 

recipient’s compensation and wages or 

gross income. In this case, however, the 

taxpayer must apply the dollar-fordollar rule as described in § 1.274– 

12(c)(2)(i)(D). In cases in which’’. 

6. On page 64032, second column, the 

second and last sentence from the 

bottom of the first partial paragraph, 

remove the language ‘‘. In that case, 

however,’’. 

7. On page 64032, third column, the 

third line of the second full paragraph, 

the language ‘‘regulations confirm’’ is 

corrected to read ‘‘regulations 

confirmed’’. 

8. On page 64032, third column, the 

twelfth line of the second full 

paragraph, the language ‘‘demonstrates’’ 

is corrected to read ‘‘demonstrated’’. 

Crystal Pemberton, 

Senior Federal Register Liaison, Publications 

and Regulations Branch, Legal Processing 

Division, Associate Chief Counsel, (Procedure 

and Administration). 

[FR Doc. 2020–26860 Filed 12–17–20; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2020–0694] 

Drawbridge Operation Regulation; Gulf 

Intracoastal Waterway, Madeira Beach 

FL 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations; request for comments. 

SUMMARY: The Coast Guard has issued a 

temporary deviation from the operating 

schedule that governs the Welch 

Causeway (SR 699) Bridge, mile 122.8 at 

Madeira Beach, Florida. A request was 

made to place the drawbridge on a daily 

operating schedule to alleviate vehicle 

congestion due to on demand bridge 

openings. This deviation will test a 

change to the drawbridge operation 

schedule to determine whether a 

permanent change to the schedule is 

needed. The Coast Guard is seeking 

comments from the public regarding 

these proposed changes. 

DATES: This deviation is effective from 

12:01 a.m. on January 1, 2021 through 

11:59 p.m. on June 25, 2021. 

Comments and relate material must 

reach the Coast Guard on or before 

February 25, 2021. 

ADDRESSES: You may submit comments 

identified by docket umber USCG– 

2020–0694 using Federal eRulemaking 

Portal at https://www.regulations.gov. 

See the ‘‘Public Participation and 

Request for Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below for instructions on submitting 

comments. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this test 

deviation, call or email LT Clark W. 

Sanford, U.S. Coast Guard, Sector Saint 

Petersburg Waterways Management 

Division; telephone 727–824–7506, 

email Clark.W.Sanford@uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Background, Purpose and Legal Basis 

The Welch Causeway (SR699) Bridge 

across the Gulf Intracoastal Waterway, 

mile 122.8, at Madeira Beach, Florida is 

a double-leaf bascule bridge with a 25 

foot vertical clearance at mean high 

water in the closed position and an 89 

foot horizontal clearance between 

fenders. The normal operating schedule 

for the bridge is found in 33 CFR 

117.287(h). Navigation on the waterway 

is commercial and recreational. 

The City of Madeira Beach Florida has 

requested the current operating 


khammond on DSKJM1Z7X2PROD with RULES