A panel of judges for the 9th U.S. Circuit Court of Appeals rejected the hemp industry’s challenge of a DEA rule that would establish CBD oil as a “marihuana extract” and therefore, a controlled substance.

The Hemp Industries Association and other hemp businesses claimed that the DEA’s rule overstepped its bounds by scheduling substances – aka the cannabinoid CBD – that were not classified as illicit under the Controlled Substances Act. To add to this, hemp-derived extracts rich in CBD are currently protected under state laws and Farm Bill provisions, the hemp advocates argued.

The DEA claims the reclassification of CBD as a “marihuana extract” was intended to track cannabis derivatives used in research to meet treaty obligations. They added these extracts and byproducts remain classified as a Schedule I substances.

Attorneys for the hemp advocates claimed the DEA’s new rule could be misinterpreted by federal and local agencies and therefore lead to unlawful product seizures and stunt a multi-billion-dollar hemp products industry.

The 9th Circuit judges said the hemp advocates could have commented during the DEA’s rulemaking process. But because the advocates failed to do so, the bulk of their challenge was moot. The judges also added the DEA’s final rule did not violate the 2014 Farm Bill.

Attorneys for the hemp advocates have stated they will request a rehearing on the matter.