The 2018 Farm Bill, signed into law in December 2018, legalized hemp and hemp-derived products (including CBD) by removing them from the Controlled Substance Act. This has the effect of allowing for their possession, production and sale under certain regulated conditions. However, the sale of food products or dietary supplements with CBD, along with the marketing of CBD as having therapeutic or health-related benefits remains illegal under federal law.
This remaining illegality is confusing to some because it seems to clash with the 2018 Farm Bill’s legalization of hemp-derived CBD. This blog post provides a high-level overview of the current federal laws and regulations surrounding the marketing and sale of CBD products in drugs, food products, and dietary supplements, and what changes to expect in the near term. This post is by no means intended to be a comprehensive overview of all laws and regulations that a CBD retailer must be aware of. Be sure to contact a competent attorney to help your CBD business ensure full compliance at every step!
What is CBD?
Cannabidiol (CBD) is a naturally-occurring compound in marijuana and hemp that is extracted primarily from the leaves, resin, or flower of cannabis plants. Cannabis plants contain approximately 113 different cannabinoids, including CBD and THC (tetrahydrocannabinol). Unlike THC, however, CBD does not cause any psychoactive effects. In the marketplace, CBD is often used as an ingredient in various products such as oils, tinctures, ointments, food items, etc. CBD is frequently marketed as a therapeutic substance that may help treat, cure, or mitigate various health conditions, such as anxiety, insomnia, pain, inflammation, opioid addiction, PTSD, nausea from chemotherapy, and epilepsy.
The Legalization of Hemp-Derived CBD
The Agriculture Improvement Act of 2018 (Pub. L. 115-334), commonly known as the 2018 Farm Bill, removed hemp and hemp-derivatives from the definition of “marijuana” under the Controlled Substances Act (“CSA”), and therefore removed them from the list of controlled substances under the federal law. The 2018 Farm Bill defines “hemp” as cannabis that has a THC concentration of “not more than 0.3 percent on a dry weight basis.” (7 U.S.C. § 1639o).
Further, the 2018 Farm Bill allows for the cultivation, processing, possession, and sale of hemp and hemp derivatives in all 50 states, if (i) it is grown by a business in compliance with either the governing State’s or Indian tribe’s own hemp requirements under what is known as a hemp production plan, or (ii) if the relevant governing state or Indian tribe does not have its own production plan in place, it is grown in compliance with federal requirements established by the USDA.[1] (See 7 U.S.C. § 1639q).
Thus, the legislation clarifies that the processing, possession, and sale of CBD is legal in all 50 states if it is extracted from legally grown hemp. However, the legislation did not make clear whether it was legal to sell hemp-derived CBD products in interstate commerce. In that regard, it is important to note that the 2018 Farm Bill explicitly preserved the FDA’s authority to regulate products containing cannabis or cannabis compounds (irrespective of whether they are derived from hemp) under the Federal Food, Drug, & Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act (PHS Act).
Immediately after the 2018 Farm Bill was passed, there was widespread confusion in the marketplace as nobody knew whether or not hemp-CBD products may be legally sold. To quell some of this confusion, the FDA immediately released a statement explaining that the agency “treat[s] products containing cannabis or cannabis-derived compounds as it does any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance.” The agency further clarified its position that it remains unlawful under the FD&C Act to introduce food containing added CBD into interstate commerce or to market CBD as dietary supplements, regardless of whether the substances are hemp-derived. As discussed further below, this lingering illegality is due to the fact that CBD is considered an active ingredient in an FDA-approved drug that has been the subject of substantial clinical investigations.
Epidiolex – CBD Prescription Drug
In June 2018, the FDA announced its approval of Epidiolex, the very first FDA-approved CBD-based drug in U.S. history. Epidiolex was approved to treat seizures associated with two rare forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome. Some medical experts, however, predict that Epidiolex will eventually be approved to treat other forms of epilepsy.
The FDA’s approval of Epidiolex is a historic event of monumental importance for the cannabis legalization movement, as it marks the first time the federal government has officially acknowledged medicinal benefits from a cannabis-derived compound.
However, as discussed further below, the FDA’s approval of Epidiolex has also created a roadblock for the CBD movement because it has impeded the ability of CBD to be used in other FDA-regulated products. This is because CBD is now considered an active pharmaceutical ingredient in an approved new drug (Epidiolex), which hinders its ability to be legally used in food products and dietary supplements. Further, Epidiolex’s limited approval as a drug to treat two specific forms of Epilepsy means that CBD may not be marketed as a drug that is intended to treat other, non-approved therapeutic uses.
Epidiolex Deschedules by DEA as a Controlled Substance
On April 6, 2020, GW Pharmaceuticals (the drug company that developed Epidiolex) announced in a press release that the Drug Enforcement Administration (DEA) has removed Epidiolex from the list of controlled substances under the CSA. This change was effective immediately. Prior to this announcement, Epidiolex was classified as a Schedule V substance, rather than a Schedule 1 substance like marijuana, heroin, and LSD.
This change is historic. It marks the first time since the CSA was passed in 1970 that a cannabis product of any kind has been removed from the controlled substance list. Further, the result of this decision is that it will now be easier for individuals to access and obtain Epidiolex. As GW Pharmaceuticals’ explained in its announcement, “prescriptions for EPIDIOLEX, like other non-controlled medicines, will be valid for one year and can be easily transferred between pharmacies. The descheduling of EPIDIOLEX also enables physicians to prescribe this breakthrough medicine free of the requirements of state prescription drug monitoring programs.”
CBD in Dietary Supplements
Under the FD&C Act, it is illegal to market CBD as a dietary supplement. This is because the FDA has concluded that CBD products are excluded from the definition of “dietary supplement” under section 201(ff) of the FD&C Act, 21 U.S.C. 321(ff). That section provides that a product is excluded from the definition of “dietary supplement” if it contains (i) any substance that is an active pharmaceutical ingredient that has been approved as a new drug by the FDA (such as Epidiolex, for example), or (ii) any substance that has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public. (21 U.S.C. § 321(ff)(3)(B)).
There is an exception to this rule if the substance was marketed in dietary supplements before the drug was approved or before the new drug investigations were authorized. However, the FDA has concluded that based on available evidence this is not the case for THC or CBD.
Further, when a substance is prohibited from use in a dietary supplement under § 201(ff)(3)(B), the exclusion applies unless the FDA, in its discretion, has issued a regulation after notice and comment authorizing its use under the FD&C Act. (21 U.S.C. § 321(ff)(3)(B)(ii)). However, to date the FDA has not issued any such regulation for any substance.
CBD in Food
CBD cannot be added to conventional foods (including animal foods and animal feed), regardless of whether it was derived from hemp or marijuana. The FD&C Act prohibits the introduction or delivery into interstate commerce any food to which has been added a substance which is an active pharmaceutical ingredient that has been approved as a new drug by the FDA (such as Epidiolex, for example), or for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public. (21 U.S.C. § 331(ll)).
As with dietary supplements, there are exceptions, such as if the substance was marketed in food before the drug was approved or before the new drug investigations were instituted. However, the FDA has concluded that based on available evidence this is not the case for THC or CBD.
When this statutory prohibition applies to prohibit the use of any substance, it prohibits the introduction into interstate commerce of any food to which the substance has been added unless FDA, in the agency’s discretion, has issued a regulation approving the use of the substance in the food. (21 U.S.C. § 331(ll)(2)]). However, no such FDA regulation has been issued for any substance.
Further, the FD&C act provides that any substance intentionally added to food is a “food additive,” unless the substance is generally recognized as safe (GRAS) by qualified experts under the conditions of its intended use, or the use of the substance otherwise meets an enumerated exception to the “food additive” definition. (21 U.S.C. §§ 321(s)).
Food additives require premarket approval by the FDA. Under the FD&C Act, if a food additive has not been approved for its intended use in food, it is deemed to be “unsafe.” (21 U.S.C. 348(a)). Use of any unsafe substance in a food product causes the product to be “adulterated.” (21 U.S.C. § 342(a)(2)(C)(i)). Introduction of an adulterated food into interstate commerce is prohibited. (21 U.S.C. § 331(a)).
Marketing CBD Products With Therapeutic or Medical Claims
The FD&C Act also prohibits companies from making therapeutic or health-related claims about products that have not been approved as drugs. Aside from Epidiolex, there are no other FDA-approved drugs that contain CBD.
Under the FD&C Act, any product, including hemp-derived CBD products, that is marketed with a claim of therapeutic or health-related benefit, or with any other disease claim, is considered to be a “drug.” More specifically, products meet the definition of “drugs” under the FD&C Act if they are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or any function of the body. ( 21 U.S.C. § 321(g)(1)). Drugs must receive premarket approval through a New Drug Application process or undergo an Over-the-Counter Drug Review process in order to be legally sold in interstate commerce. (21 U.S.C. § 331(a).
If a drug is not generally recognized as safe and effective for the conditions prescribed, recommended, or suggested in the labeling, they are deemed to be “new drugs.” (See 21 U.S.C. 321(p)). A new drug must be approved by the FDA for its intended use before it may be introduced into interstate commerce. (21 U.S.C. §§ 331(d) and 355(a)).
FDA’s Efforts to Develop New Rules Allowing CBD Products
The FDA has been consistent in its position that it is unlawful to sell CBD in food products or dietary supplements in interstate commerce. Since 2015, the FDA has sent numerous warning letters to CBD companies for marketing their products with unsubstantiated health claims, and for selling food products and dietary supplements containing CBD. The FDA has continued to send warning letters to CBD sellers even after the 2018 Farm Bill’s legalization of hemp.
Recently, however, the FDA confirmed that it does not have any plans to pull CBD products from the marketplace on a mass scale. This was revealed in late February 2020, when FDA Commissioner Stephen Hahn acknowledged that Americans see value in these products and that it would be “a fool’s game” to yank them from the shelves.
Meanwhile, following the passage of the 2018 Farm Bill, numerous members of Congress, including Senate Majority Leader Mitch McConnell (R-KY), have been pushing the FDA to expedite the development of a regulatory framework allowing for hemp-derived CBD products.
In September 2019, a group of bipartisan lawmakers sent a letter urging the FDA to provide more market clarity and to expedite the agency’s process of creating a regulatory pathway for food and dietary supplements containing hemp-derived CBD. This bipartisan coalition includes Senate Majority Leader Mitch McConnell (R-KY),
Congress exerted more pressure on the FDA in December 2019, when it passed a spending bill requiring that the agency provide Congress with an update within 60 days on its progress towards developing regulations for hemp-derived CBD products. Although FDA initially missed the 60-day deadline, the agency finally sent an update to Congress on March 5, 2020 announcing that it is “actively considering potential pathways for certain CBD products to be marketed as dietary supplements.
Unfortunately, the FDA’s update revealed that not much progress has been made toward developing new rules or policies for hemp-derived CBD. The update explained that the FDA remains concerned about potential safety risks to consumers and wants to evaluate more clinical and toxicology research on CBD, and noted that available data demonstrates CBD may be associated with potential risks, including liver injury, drowsiness, and possible adverse drug interactions. The agency also remains concerned about marketing CBD products with unsubstantiated health claims, product mislabeling, and contamination of products with high levels of THC, pesticides, and heavy metals.
In short, the agency’s current position is that while it remains committed to working towards a regulatory pathway, it first wants more research conducted in order to further understand the safety profile of CBD. The update also emphasized that prior to the passage of the 2018 Farm Bill, it was difficult to study CBD because it was still considered a Schedule 1 controlled substance. As a result, the FDA believes that limited systematic data exists to inform its regulatory approach to CBD.
Specifically, the key safety questions the agency seeks to address are:
What happens if you use CBD daily for sustained periods of time?
hat level of intake triggers the known risks associated with CBD?
How do different methods of exposure affect intake (e.g., oral consumption, topical, smoking or vaping)?
What is the effect of CBD on the developing brain (such as children who take CBD)?
What are the effects of CBD on an unborn child or breastfed newborn?
How does CBD interact with herbs and botanicals?
Does CBD cause male reproductive toxicity in humans, as has been reported in studies of animals?
Are there differing safety concerns for use in certain animal species, breeds, or classes?
Are any residues formed in edible tissues of food producing animals?
To gather more information and data on these issues, the FDA has reopened the public docket and public comment period indefinitely to gather additional scientific data and research on the risks and benefits of CBD.
Congressional Efforts
Since the 2018 Farm Bill was passed, a bipartisan coalition in Congress has sought to create a legislative fix. In January 2020, bipartisan lawmakers introduced bill H.R. 5587, which would allow hemp-derived CBD to be marketed in dietary supplements. This proposed legislation would amend the FD&C Act (discussed above) by removing hemp-derived CBD from the prohibition on marketing approved drugs as dietary supplements. The bill has been introduced to the House and its fate is yet to be determined, but given the broad bipartisan support for allowing dietary supplements with hemp-derived CBD, many expect that this legislation will eventually be enacted.
Takeaways and Advice
These laws are constantly in flux and updates are being released nearly every month as the federal government actively seeks to develop a new regulatory pathway for CBD. Complicating matters even more, in many jurisdictions, there is a conflict between these federal law and state laws legalizing recreational cannabis and the sale of CBD products. The actual federal statutes that a CBD product violates may vary from product to product, but the gist is that in almost all cases it remains prohibited. As this industry remains in its infancy, the federal government is taking a slow and steady approach to establishing the necessary regulatory frameworks for allowing a robust CBD marketplace.
As such, it is important to take care before putting a product out to market. The liability costs are high, and there are far safer alternatives than risking the wrath of the federal government. We have seen the damage that jumping to market too quickly can have on a company. During this time of uncertainty, proceed with caution. Be sure to stay informed on the current state of the law, and make sure you have competent attorneys advising you on how to comply with all applicable laws and minimize risk.
Adam Berger and Shuki Greer, friends of the firm, are California based attorneys who specialize in cannabis and hemp. They can be reached through this site or at [email protected]
[1] Under the 2018 Farm Bill, the USDA has primary regulatory authority over hemp production. However, the Farm Bill also allows States (through their Departments of Agriculture), Indian tribal governments, and agencies representing the District of Columbia or any territory or possession of the US, to have primary authority over the production of hemp if they submit a plan approved by the USDA. (See 7 U.S.C. 1639p).
