Cannabis Law Glossary

The Agricultural Act of 2014 that first authorized hemp pilot programs for research purposes in states with industrial hemp laws, creating the regulatory foundation that preceded full hemp legalization in 2018.

The Agriculture Improvement Act of 2018 that federally legalized hemp by removing it from Schedule I of the Controlled Substances Act, defining it as Cannabis sativa L. with no more than 0.3% delta-9 THC.

A hemp extract containing CBD and most naturally occurring cannabinoids and terpenes, but with THC removed to non-detectable levels — positioned between full-spectrum and CBD isolate.

The FDA has authority over CBD and other cannabinoids in food, dietary supplements, and drugs; it has determined that CBD in food and supplements is unlawful without explicit approval, creating regulatory uncertainty for the hemp-CBD industry.

Federally recognized tribes have sovereign authority over their lands; DOJ guidance permits tribes to authorize cannabis activities on tribal land using state-law-equivalent regulatory frameworks, creating unique opportunities and compliance challenges.

A provisional cannabis license granted to an applicant that has passed initial vetting but has not yet completed all build-out, inspection, or operational requirements needed for a full license.

State licensing frameworks use scoring criteria — known as merit or priority criteria — to evaluate and rank license applications, with criteria varying by state and license type.

A small-scale cannabis license type that allows a single entity to perform limited cultivation, processing, and retail functions, designed to lower barriers to entry and support independent operators.

A court-supervised process to manage a distressed cannabis company's assets, complicated by the fact that federal courts may refuse to administer a Schedule I cannabis business.

The federal administrative process of moving cannabis from Schedule I to a lower schedule under the Controlled Substances Act, which would relax or eliminate certain federal prohibitions.

A cannabis license type or priority designation designed to increase participation from communities disproportionately harmed by the War on Drugs, often featuring reduced fees, technical assistance, and priority application scoring.

A business model in which a single operator holds licenses for multiple supply chain activities — cultivation, processing, and retail — within a state's cannabis licensing framework.

A purified form of cannabidiol containing 99%+ CBD with no other cannabinoids, terpenes, or plant compounds; generally the most legally straightforward CBD ingredient for food and supplement products.

A 2013 DOJ policy memo that directed federal prosecutors to deprioritize cannabis enforcement in states with robust regulatory frameworks, focusing instead on eight priority areas.

The eight specific federal enforcement priorities outlined in the 2013 Cole Memorandum that state-licensed cannabis businesses must avoid to minimize federal prosecution risk.

The federal law enacted in 1970 that established the scheduling framework for controlled substances and classified marijuana as Schedule I — the foundation of federal cannabis prohibition.

The most restrictive federal drug classification under the Controlled Substances Act, reserved for substances with no accepted medical use and high abuse potential — including marijuana since 1970.

A minor hemp-derived cannabinoid isomer of delta-9 THC, produced synthetically from CBD; its legal status mirrors delta-8 THC as a contested gray-area compound under the 2018 Farm Bill.

A psychoactive cannabinoid found in trace amounts in cannabis, often synthesized from hemp-derived CBD via isomerization; its federal legal status is disputed under the Controlled Substances Act.

The primary psychoactive compound in cannabis; federally a Schedule I controlled substance above 0.3% dry weight in hemp, and the threshold compound separating legal hemp from federally controlled marijuana.

A hemp extract containing CBD along with the full range of naturally occurring cannabinoids, including trace amounts of delta-9 THC (up to 0.3%), terpenes, and flavonoids.

A landmark cannabis employment case addressing whether state-legal cannabis operators are protected from federal interference in labor disputes involving plant-touching workers.

A hydrogenated form of THC produced by adding hydrogen atoms to THC's molecular structure; marketed as a hemp-derived intoxicant and subject to the same contested legality as delta-8 THC.

Hemp-derived cannabinoid products that produce psychoactive effects, including delta-8, delta-10, and HHC products, which occupy a contested legal gray area under the 2018 Farm Bill.

A provision added by the Tax Cuts and Jobs Act of 2017 that allows small businesses to use a simplified inventory accounting method, which cannabis operators have used to expand their allowable COGS under Section 280E.

Conventional bank loans are generally unavailable to plant-touching cannabis businesses due to federal prohibition; operators rely on private lending, sale-leaseback, and debt structures from specialized cannabis lenders.

The formal DEA and HHS process of moving marijuana down the Controlled Substances Act schedule; the term "marijuana" is used in the CSA and DEA rulemaking, while "cannabis" is preferred in state law.

The challenge cannabis operators face accessing banking services because federal law exposes banks to money laundering liability for serving Schedule I businesses — the problem SAFE Banking aims to fix.

A cannabis company holding licenses to cultivate, process, or sell cannabis in multiple states, typically structured to separate plant-touching entities from management companies to reduce 280E exposure.

A 2009 DOJ memorandum directing federal prosecutors not to target individuals acting in compliance with state medical marijuana laws, the predecessor to the Cole Memo.

The critical structural distinction between cannabis business activities subject to Section 280E (plant-touching) and those potentially exempt (non-plant-touching management or technology companies).

The administrative process of moving cannabis from Schedule I to a lower schedule under the Controlled Substances Act — currently proposed as Schedule III following a 2023 HHS recommendation.

Federal civil and criminal RICO (Racketeer Influenced and Corrupt Organizations Act) claims have been asserted against cannabis businesses and their investors, creating litigation risk for operators in legal states.

Federal legislation passed multiple times by the House that would give banks a safe harbor for providing services to state-licensed cannabis businesses, addressing the industry's lack of access to conventional banking.

The two Controlled Substances Act classifications at the center of the cannabis rescheduling debate — Schedule I bans deductions and research; Schedule III would allow both.

IRS code provision that disallows federal tax deductions for businesses trafficking Schedule I or II controlled substances, forcing cannabis operators to pay tax on gross profit.

The Strengthening the Tenth Amendment Through Entrusting States Act — proposed federal legislation that would exempt state-legal cannabis activity from the Controlled Substances Act.

The federal regulatory program established by the 2018 Farm Bill under USDA authority that governs commercial hemp production, including licensing, testing, disposal, and state/tribal plan approval.

A cannabis business model in which a single operator controls cultivation, processing, and retail — either required or restricted by state law depending on jurisdiction.