It has been more than one year since the Agricultural Improvement Act of 2018 (better known as the 2018 Farm Bill) was enacted removing hemp and hemp-derivatives like CBD from the Controlled Substances Act. And while the U.S. Food and Drug Administration (FDA) has held a public hearing on the use of cannabis, including hemp-derived CBD, in products like food and beverage, the industry anxiously awaits guidance or rules on advertising and labeling (which includes the label and packaging, as well as anything that you say about the product, including any claim that you make on your label, package, website, social media, etc.) for CBD-containing products.
Add to this lack of guidance, FDA currently takes the position that CBD may not be incorporated into and sold as food or a dietary supplement. A number of states have also specifically prohibited the use of CBD in foods, such as Massachusetts, Washington and North Carolina. Therefore, any company wishing to include CBD in food or beverages should proceed with caution. On the other hand, a broad spectrum of statutes and regulations exist from other states on the advertising and labeling of CBD-containing foods and beverages, including some states that require any product containing CBD to be packaged in be child-resistant, tamper-evident, and light-resistant containers. Even if you are not selling in a state that requires this type of packaging, it can still be beneficial from a products liability perspective to follow the more stringent packaging regulations.
Duane Morris associate Kelly Bonner shares legal insight on CBD products and services in the January issue of DaySpa magazine.
From the publication:
Consider the source. CBD can be derived from both hemp and marijuana, which have different definitions in U.S. law and are subject to different statutory and regulatory requirements. Hemp-derived CBD products are not illegal to sell and possess under federal law, as long as they contain no more than 0.3 percent tetrahydrocannabinol (THC). Marijuana has more than 0.3 percent THC, and is a Schedule I controlled substance under the federal Controlled Substances Act.
Get proof. Given the current lack of federal testing requirements for CBD products, it can be difficult to ensure that those purchased from third-party vendors contain no more than the permitted level of THC. So it’s extremely important that spas get anything containing CBD from a trustworthy supplier who can verify ingredients, confirm THC levels with third-party labs and/or provide certifi cates of analysis.
Act locally. While the 2018 Farm Bill lifted the federal ban on the commercial cultivation of hemp and derivatives that contain no more than 0.3 percent THC, the ability to manufacture, market and sell CBD products is still heavily regulated at the state level, and changing rapidly.
Make no promises. The U.S. Food and Drug Administration (FDA) has issued warning letters to a number of CBD companies that have touted their products as having certain health benefi ts in their promotional materials and on packaging or websites. Spas should ensure that any products or services offered don’t come with false or misleading claims.
Handle with care. Although research into the risks of CBD use is ongoing, the FDA has noted potential adverse health effects linked to the use of cannabis products containing THC by pregnant or lactating women. Even though CBD topicals typically contain very low levels of THC, spas should be up front with clients about potential risks.
Since the 2018 Farm Bill passed in December 2018, removing hemp from the Controlled Substances Act and thus legalizing it under federal law, consumer goods containing the hemp-derivative cannabidiol (CBD) have become exceptionally popular. With that growing popularity among consumers has come increased scrutiny by federal regulators whose mission is consumer safety and protection, such as the Food and Drug Administration and Federal Trade Commission, and now by the plaintiffs’ bar, which files consumer class actions based on advertising. As the recent spate of warning letters and consumer class actions demonstrate, hemp-derived CBD product manufacturers and others in the supply chain for those products have to be mindful of the claims they make to consumers about their products.
Duane Morris Partner Frederick Ball is quoted in the Agri-Pulse article “Regulatory Uncertainty Hangs Over Production of Industrial Hemp.”
Nearly a year after the 2018 farm bill legalized industrial hemp production, the business community continues to seek answers to questions about testing and marketing of products derived from the crop, the commercial potential of which has sparked interest throughout the country. […]
Rick Ball, a lawyer with Duane Morris in Boston, said on the sidelines of the FDLI meeting that he has “no clue” when FDA might take action.
Ball said regulatory confusion is stoked in some cases by different rules in different states. In Massachusetts, for example, farmers were left holding their hemp after the state followed FDA and said CBD cannot be used in foods or dietary supplements or marketed with health claims.
“They lost a huge market for their product,” Ball said. […]
Duane Morris partner Neville M. Bilimoria is quoted in the Law360 article, “CBD Rules In Limbo As FDA Grapples With New Cannabis Era.”
Hemp may have been legalized less than a year ago, but CBD derived from it is already on its way to becoming a multibillion-dollar industry. However, sales of everything from CBD gummies to lattes are occurring in a legal gray area as the U.S. Food and Drug Administration struggles with regulating the largely unstudied ingredient. […]
“This is a watershed year for the FDA and its coming to grips with the increasing demand from the consumer public over marijuana, cannabis, CBD, hemp. It’s trying to catch up to what the consumers are touting as being therapeutic uses for CBD and THC,” Mr. Bilimoria said. “It’s basically saying, ‘Wait, everybody slow down. We’re the FDA. We rely on science before we can approve any uses and regulate any uses of cannabis or CBD.'” […]
Mr. Bilimoria said he can’t blame the FDA for “taking it slow,” but said doing so is frustrating when CBD is already all over store shelves. […]
To read the full article, visit the Law360 website (subscription required).
Among other key provisions, the new regulatory framework provides for USDA’s approval of State and Tribal Land hemp programs established under the 2018 Farm Bill, which will end debate as to whether hemp activities in a State or Tribal Land receiving such approval are federally lawful. To be approved, those plans will have to contain stringent requirements for testing the THC content of hemp to ensure it does not meet the definition of marijuana, and contain procedures for the enforcement of violations of the State or Tribe’s hemp program. Importantly, the regulatory framework provides for USDA’s granting of hemp production permits in states and territories that do not establish hemp programs for approval by USDA.
Despite recent bipartisan calls on the FDA to regulate hemp-derived CBD products, the U.S. Food & Drug Administration appears to be adhering to the status quo, at least with respect to issuing warning letters to companies deemed noncompliant with existing regulations. Case in point: on September 18, 2019, the FDA issued a warning letter (posted to the FDA’s website last week) to Alternative Laboratories, a dietary supplement manufacturer based in Naples, Florida.
According to the letter, the FDA conducted an inspection of Alternative’s dietary supplement manufacturing facility over five days in May and June; the inspection focused on the adequacy of labels for certain products manufactured and distributed by the company.
The letter focuses on Alternative’s allegedly impermissible representation of 2-amino-5 methylheptane and Octodrine (DMHA) as a dietary ingredient in certain products. It also calls attention to the fact that Alternative’s product label for CBD oil distributed under the “Green Roads” brand name runs afoul of the Food, Drug & Cosmetic (FD&C) Act in that the product “cannot be a dietary supplement because … [the] FDA has concluded based on available evidence that CBD products are excluded from the dietary supplement definition under” the FD&C Act.
To support its contention that CBD products cannot be dietary supplements as defined by federal law, the FDA notes in its warning letter to Alternative that “CBD is the active ingredient in the approved drug product Epidiolex,” designed to treat certain rare, severe forms of epilepsy. Further, the FDA stresses that significant clinical research investigations concerning the use of CBD have been made public, including investigations related to Epidiolex and Sativex, a drug for the treatment of spasticity due to multiple sclerosis (MS) that has been approved for use in 25 countries (outside the U.S.) and for which the drug manufacturer, GW Pharmaceuticals, plans to seek FDA approval.
The fact that warning letters keep coming–from both the FDA and the FTC–signifies that although there may be a groundswell of public demand for regulatory reform and clarity on the issue of CBD products, the federal regulatory agencies appear to be staying the course. As such, companies operating in the space should remain vigilant and adhere to a compliance policy that reflects–for now–the reality of current regulations and restrictions.
The past week has shown the challenges that the cannabis industry supply chain—manufacturers, processors, distributors and dispensaries—faces, as regulators target claims relating to the health benefits of CBD and media outlets report, without any scientific evidence, that cannabis vaping may be linked to lung illnesses, and, as of the issuing of this Alert, the Trump administration is reported to be poised to ban flavored nicotine vaping. These kinds of issues could spur claims against cannabis industry participants for consumer fraud, personal injury and products liability, and heighten the scrutiny of cannabis products by federal and state regulators.
On September 10, 2019, the Federal Trade Commission announced that it had sent warning letters to three unidentified businesses “that sell oils, tinctures, capsules, ‘gummies,’ and creams” containing hemp-derived CBD, concerning health-related claims about the benefits of their CBD products. Although the FTC did not release the warning letters or identify the recipients, the FTC’s press release announcing the warning letters explained that the letters were issued to reinforce that “it is illegal to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims.”