Navigating the Web of CBD Regulations How to Assist Clients, 1219 COBJ, Vol. 48, No. 11 Pg. 24
| Author | BY AMANDA MILGROM |
| Position | Vol. 48, 11 [Page 24] |
CANNABIS LAW
BY AMANDA MILGROM
Th is article outlines federal regulations governing CBD and how lawyers can assist clients in navigating this challenging and fast-changing landscape.
Products made with cannabidiol, commonly known as CBD, have become ubiquitous. CBD infiltrates society through the food and beverages on our shelves, the lotions and oils at our local drug stores, and the dog treats at pet stores. The CBD industry is projected to be worth up to $20 billion by the year 2024.1 Even the national drugstore chain CVS is selling CBD products in at least eight states.2
Many producers and sellers of hemp and CBD products are incorporating CBD into their existing pro ducts to make new products. They rely on their lawyers to help diem navigate a complex, and seemingly contradictory, collection of laws and regulations. It is thus critical for lawyers to be involved in every stage of die marketing process.
This article takes an in-depth look at federal CBD regulations. It covers how companies should advertise hemp-derived CBD products and what they should include, or not include, on their product labels. Although this article is limited to federal regulations and labeling standards, these federal standards do not necessarily preempt state law, so applicable state laws may still apply.3
Federal Oversight of CBD
Federal regulation of CBD presents a complicated legal analysis. Four independent federal entities have direct oversight of CBD: the U.S. Congress, die U.S. Drug Enforcement Administration (DEA), the U.S. Food and Drug Administration (FDA), and the Federal Trade Commission (FTC). Each has its own applicable laws and rules, and its own interpretation of the legal authority.
For example, Congress removed industrial hemp and industrial hemp derivatives from the list of Schedule 1 drugs in 2018. Schedule 1 drugs are defined as drugs with no currently accepted medical use and a high potential for abuse.[4] This means that producing and selling industrial hemp and its derivatives (including CBD) are now legal under federal law. In addition, Congress has deprived the DEA of funds to prohibit the transport, processing, sale, or use of industrial hemp grown in accordance with federal law. This takes the teeth out of DEA's efforts against CBD. The DEA, however, still considers CBD to be a Schedule 1 drug under die Controlled Substances Act and enforces its use as illegal.
Meanwhile, die FDA also regulates cannabis-related products, including CBD. The FDA has declared that adding CBD to food products and selling CBD as a dietary supplement violates FDA regulations. Therefore, die sale of CBD is currently not permitted across state lines.
Accordingly, die legal landscape is currently a confusing maze of rules and regulations; whether die sale of hemp-derived CBD is lawful depends on die federal entity involved in die transaction. Because the FDA considers die sale of CBD in food or its advertisement as a dietary supplement to be illegal, and die DEA views CBD as a Schedule 1 drug, it is impossible to completely avoid die legal risks of selling CBD in interstate commerce. Yet while various interpretations of die law are technically at odds with one another, a company wishing to sell CBD products within a state should be able to avoid most thorny compliance issues by following die recommendations below.
Congress Enacts Legislation
Last year, Congress passed the Agricultural Improvement Act of 2018 (the 2018 Farm Bill), which replaced the Agricultural Improvement Act of 2014. The 2018 Farm Bill was the first piece of federal legislation to legalize hemp.[5] It established a new category of cannabis classified as "hemp"—defined as cannabis and cannabis derivatives with extremely low (no more than 0.3% on a dry weight basis) concentrations of delta-9-tetrahydrocannabinol (THC).6 Previous legislation on the subject, the 1937 Marihuana Tax Act and the 1970 Controlled Substances Act, failed to distinguish between cannabis and hemp plants. As a result, before the 2018 Farm Bill, hemp was banned and classified as a Schedule 1 drug alongside cannabis.
The
2018 Farm Bill also amended the Controlled Substances Act by
declassifying hemp as a Schedule 1 drug, but this did not
legalize CBD generally. CBD remains a Schedule 1 drug under
federal law subject to a narrow exception: if hemp is
produced by a licensed grower in a manner consistent with the
2018 Farm Bill and associated state and federal regulations,
it is legal for production and sale.
In addition, Congress passed the Omnibus Appropriations Bill, which prevents the DEA from using any funds
to prohibit the transportation, processing, sale, or use of industrial hemp, or seeds of such plant, that is grown or cultivated in accordance with subsection section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.8
This provision greatly curtails DEA's ability to prosecute any legal producers or sellers of hemp-derived CBD.
The DEA's Perspective
Despite Congress's decision to legalize hemp, die DEA continues to place significant obstacles in the path of hemp cultivation, production, and sales. In 2016, it promulgated a rule stating that "marihuana extract" (which includes hemp extract) containing one or more cannabinoids is illegal, even if die extract does not contain THC.9
In 2018, following the passage of the 2018 Farm Bill, the DEA reinforced that CBD remains a Schedule 1 drug.[10] Essentially, this means that all CBD—including CBD derived from hemp— remains banned by the DEA as a substance "with no currently accepted medical use and a high potential for abuse."11
The FDA's Restrictions
At the same time that Congress passed the 2018 Farm Bill, it explicitly preserved the FDA's authority to regulate products containing cannabis or cannabis-derived compounds under die federal Food, Drug, and Cosmetic Act (the Act) and section 351 of the Public Health Act.12 In response, die FDA quickly issued a statement explaining that Although hemp is no longer an illegal substance under federal law, the FDA will continue to regulate cannabis and hemp products while it conducts research on the health benefits or potential dangers of CBD.13
Therefore, per the FDA's regulations, cannabis products marketed with a claim of therapeutic benefit and CBD-infused food or beverages, regardless of whether the CBD is hemp-derived, must be FDA approved before they can be sold. Practically speaking, this means that the FDA has prohibited die introduction of CBD-infused food and drinks and CBD dietary or nutritional supplements into interstate commerce. However, die FDA has not strictly enforced these rules, as evidenced by die plethora of CBD products being sold across state lines, even on mainstream marketplaces like Amazon.14 Instead, the FDA has been sending warning letters to CBD companies it contends are making egregious health claims about CBD, such as claims that CBD can treat or cure cancer or hair loss. And notwithstanding its regulatory restrictions on CBD products, die FDA has approved a specific use of CBD.
In June 2018 the FDA approved a CBD prescription drug product, Epidiolex, to treat rare, severe forms of epilepsy.15 It is the first, and to date only, FDA-approved CBD product. Because CBD is the active ingredient in Epidiolex, die FDA has stated that CBD cannot be added to food or marketed as a drug without going through the FDA's established drug approval processes.16 While its approval of Epidiolex briefly caused the market to believe that the FDA would approve all CBD products, the FDA quickly quashed that understanding and reinforced its non-approval of CBD infused food, drinks, and dietary supplements.
But CBD producers and sellers yet have options. The FDA has succumbed to intense pressure from CBD producers and sellers and i s working diligently to determine the final legal status of CBD. It held a public hearing on May 31,2019 for stakeholders to share their experiences and challenges with products containing cannabis and CBD, including information related to product safety, as well as to solicit input relevant to the agency's regulatory strategy...
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