For most CBD companies, passage of the 2018 Farm Bill in December seemed like a good thing. Popular consensus held the Food and Drug Administration soon would clarify its stance on cannabidiol, paving the way for sensible regulations.
Unfortunately, it appears the FDA’s duck, dodge, and deflect strategy persists. Here’s all we know right now: Hemp-derived CBD is federally legal so long as the THC content is below 0.3 percent by dry weight. The FDA held a public hearing May 31 “to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.” The agency also established an online process to collect public comment through July 2. While the measures represent a good start and the FDA has indicated it will move as quickly as possible to issue guidance, the agency also warned the process of creating a pathway to approval for health-and-wellness products could take years. The uncertainty is maddening for companies that must assess their risk as they move forward with product development and marketing.
“I think everyone is eager to see some guidance sooner rather than later as more and more people come out with the CBD products that consumers are demanding,” said Tim Moxey, co-founder of Mr. Moxey’s Mints.
When Moxey says “everyone,” he means everyone. The hurry-up-and-wait posture the FDA has adopted is hurting companies big, small, and on the sidelines waiting to launch. While the marketplace has seen a rush of smaller companies aspiring to make a name for themselves and hoping for the best in the way of enforcement, many larger companies are waiting to see how the situation pans out before taking the costly, and precarious, plunge. Companies that have been in the space for a while are trying to stay on top of the shifting environment. “You hear so much [gossip] out in the industry,” said Moxey. “But people don’t always tie what they say back to fact.”
The Farm Bill seemed like a clear-cut victory for CBD but, as always, the devil is in the details: The law explicitly preserved the FDA’s authority to regulate products containing hemp or hemp-derived compounds under the Food, Drug, and Cosmetic Act and section 351 of the Public Health Service Act. FDA treatment of products containing hemp-derived compounds shows the agency subjects them to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless whether the cannabis or cannabis-derived compounds are classified as hemp under the 2018 Farm Bill. However, while in the short run this seems like just another obstacle for the industry, in the long run the Farm Bill will be looked at as the best thing to happen for the plant.
“The descheduling of CBD in the 2018 Farm Bill was a huge step in the long-running journey of cannabis acceptance and understanding,” said Moxey.
While the FDA seems poised to oversee how CBD is regulated in the near future, in typical agency fashion it has hinted the more prudent course may be for Congress to take up the issue and pass legislation outlining regulations. As things stand now, however, states with established hemp laws or existing cannabis laws will be well-positioned to lead the way on CBD products, from topicals and supplements to infused foods and beverages. “We hope these states, and others that follow, will continue to uphold consumer safety as a top priority,” Moxey said.
It’s no secret the FDA realizes many states have passed laws removing state restrictions on CBD and its derivatives or are in the process of doing so. Again, while the agency publicly declares “it is important to conduct medical research into the safety and effectiveness of cannabis products through adequate and well-controlled clinical trials,” FDA falls short of indicating how it may or may not police those states. Former FDA Commissioner Scott Gottlieb, M.D, stated many times the FDA “welcomes the opportunity to talk with states who are considering support for medical research of CBD and its derivatives, so we can provide information on federal and scientific standards.” Not exactly the kind of answer CBD executives, or their consumers, can take to the bank.
“Our customers are certainly confused,” said Joel Greengrass, chief executive officer at Theramu. “They are watching states handle CBD in very different, and very public, ways with little to no explanation.”
Greengrass added it’s vital for CBD companies to read up on any state to which they will be distributing, as each state’s laws vary—and change with the wind. “Texas and Idaho have taken particularly hard stances, but both states have bills pending,” he said, “while Louisiana is currently choosing to ignore the 2018 Farm Bill and the declassification of CBD from the controlled substance list.”
Lately, too, a lot of companies have been making claims that can be misleading to grab attention or get people to try their products. According to Moxey, that’s not in the best interest of the industry. Research, clarity, and accountability are needed. “We want to ensure that at the end of the day consumers can get the products and experiences they are looking for, and that requires us all to work hand in hand,” he said. “Consumer safety and education should be our top priority, and some companies out there don’t see it that way.”
Moxey is hardly alone when it comes to education, safety, and transparency. While there are bad actors in every industry, the number of CBD companies that have been called out for making unproven medical claims or listing ingredients not actually in the product is disturbing. So, it’s not surprising many companies recently have been outed for trying to pass off hemp seed oil products that contain no CBD as CBD products. “Not all CBD is created equal,” said Greengrass. “Not all CBD products are created equal, and not all CBD companies are created equal. It is important that consumers know the difference.”
FDA treatment of products containing hemp-derived compounds shows the agency subjects them to the same authorities and requirements as FDA-regulated products containing any other substance.
In fact, in April the FDA sent three warning letters to companies marketing CBD products using “egregious and unfounded claims that are aimed at vulnerable populations.” The letters were issued jointly by FDA and the Federal Trade Commission, which has authority to protect consumers from unfair trade practices, including false or misleading advertising claims. As examples of unlawful claims, the letters cite assertions that CBD products stop growth of cancer cells, slow the progression of Alzheimer’s, and reduce withdrawal symptoms in individuals with substance use disorders.
According to Amy Andrle, co-founder of L’eela, most of her peers welcome solid and sensible FDA regulation. “Unfortunately, some unsavory businesses focus only on the bottom line and claim inaccurate potencies, or they do not properly vet source materials,” she said. “Consumers should always ask for a certificate of authenticity [from a reputable testing laboratory] before buying a CBD product.”
Dealing with the legality of health-and-wellness claims is nothing new to Andrle, who has run a cannabis dispensary in Colorado for almost a decade. She learned early on that for THC it’s common knowledge to avoid making any specific medical claims because “we’re not doctors.” However, she has found a workaround with “sharing anecdotal information.” But, she cautions, “Be sure the clients understand recommendations are not prescriptions. The number one health and wellness claim most in the CBD industry discuss is the compound’s ability to treat inflammation. Inflammation has been proven to cause a number of ailments and health issues. Using this information, a client can discern whether the choice is right for them.”
All this confusion and uncertainty has left lawyers scrambling to decide how to advise their clients. Henry Baskerville, managing partner at Fortis Law Partners, said he has no option but to tell his clients hard truths. “I tell them to make sure they understand where their products are coming from and what their [cannabinoid] content is,” he said. “I tell them to make sure they understand the laws of the states they are buying from and shipping to. I also tell them to be careful using the U.S. Postal Service, because I have seen products confiscated for questionable reasons.”
While many of his clients want to know what they can and cannot say in marketing speech, Baskerville is extra-cautious. FDA officials have warned businesses making health or medical claims is illegal, because the product has not been tested or approved by the FDA for consumption. That stance isn’t going to change anytime soon, he believes. “I tell clients to be careful making any such claims, or to couch such claims in language such as ‘some customers have experienced…’”
Additionally, Baskerville has seen lawsuits challenging the quality, or lack thereof, of products. He’s also seen businesses shut down by the FDA and local health departments. “This happened in New York City recently,” he said. “I don’t know of any product liability cases yet, but we may see some soon.”
Marketing CBD as a dietary supplement is ill-advised, as well. Based on available evidence, the FDA has concluded CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the federal Food, Drug, and Cosmetic Act.
Most companies are enthusiastically optimistic about the progress CBD has made in the past year, but the FDA remains a wildcard. Baskerville has two words of advice: Be cautious.
Cheat Sheet
Has the FDA approved CBD for children with epilepsy?
Yes.
The FDA approved Epidiolex, which contains a highly purified form of CBD, for the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age and older.
Can CBD products be sold as dietary supplements?
No.
May food products to which CBD has been added be sold in interstate commerce?
No.
Section 301(ll) of the federal Food, Drug, and Cosmetic Act prohibits introduction or delivery for introduction into interstate commerce any food to which has been added a substance that is an active ingredient in a drug product approved under section 505 of the FD&C Act.
Did the 2018 Farm Bill preserve FDA’s authority to regulate products containing hemp or hemp-derived compounds?
Yes.
Does the FDA object to the clinical investigation of hemp for medical use?
No.
The FDA believes scientifically valid research conducted under an Investigational New Drug application is the best way to determine what patients could benefit from the use of drugs derived from hemp.
Can CBD be added as an ingredient in cosmetics?
Yes.
Is CBD a lawful additive in food at the state level?
Yes and no.
Depending on the state in which hemp CBD food products will be sold, the answer is often “no.” FDA guidance states hemp-derived CBD cannot be added to foods. Some states have taken an aggressive approach to enforcement, while others haven’t.
