Fourth Circuit Rejects DEA’s Interpretation of Intoxicating Hemp Products; Upholds Termination for Positive Marijuana Test

In Anderson v. Diamondback Investment Group, the Fourth Circuit Court of Appeals addressed the legal status of hemp-derived products like CBD and Delta-8 THC. While the 2018 Farm Bill legalized hemp and its derivatives with a Delta 9 tetrahydrocannabinol (THC) content of no more than 0.3%, the court acknowledged that the processing of hemp can lead to high levels of different types of intoxicating THCs and other cannabinols exceeding this limit.

Importantly, the court rejected the DEA’s interpretation that products derived from hemp containing intoxicating levels of THC fall outside the definition of legal hemp. The DEA had previously suggested that hemp-derived products with more than 0.3% THC should be treated as illegal controlled substances. However, the Fourth Circuit disagreed with this view, clarifying that the mere presence of THC, even in an intoxicating form like Delta-8 or other synthetically derived, intoxicating THCs, does not automatically make a product illegal under federal law unless it exceeds the specific 0.3% limit established by the 2018 Farm Bill.

While the decision is helpful in clarifying the legal status of hemp and hemp products under the Farm Bill, the case focused on employment consequences for Anderson. She tested positive for marijuana at her workplace and claimed that she was taking legal hemp products for medical reasons. Anderson claimed that she was improperly terminated under the Americans with Disabilities Act (ADA) and North Carolina’s lawful use of lawful products statute. Despite the Court’s rejection of the DEA’s narrow stance about the definition of hemp products, the decision held that employers are not required to differentiate between positive drug tests stemming from legal hemp products and those from illegal marijuana. Diamondback’s neutral drug-testing policy, which did not distinguish between these sources, was upheld as a legitimate, non-discriminatory basis for the termination.

This ruling underscores the complexity of hemp regulation: while the Fourth Circuit rejected the DEA’s narrow view on intoxicating hemp products, employees using hemp derivatives like Delta-8 still face potential employment risks due to the lack of distinction in standard drug tests.