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news February 26, 2020

Will 2020 Provide A Clearer Vision for CBD? A Lookback at 2019 and Predictions for the New Year.

By: Suzanne Bassett

A year has passed since the 2018 Farm Bill was signed into law legalizing hemp and hemp-derived products, including cannabinoids, with no more than 0.3% tetahydrocannabinol (THC).[1]  However, the regulatory status of cannabidiol (CBD) finished products regulated by the Food and Drug Administration has not been easy sailing with several federal and state restrictions still in place.

Throughout 2019 we saw several states clarify positions on hemp and CBD-based products, either adopting FDA’s position or by carving out their own legislation either legalizing or expressly prohibiting CBD products in food, supplements, or cosmetics.   FDA has not budged on the illegality of food and dietary supplements containing CBD but appears to be focused primarily on products making disease claims.

Heading in to 2020, we expect to see more action at the state level as states move to finalize hemp plans in time for this year’s growing season.  However, the regulatory status of CBD-based products at the federal level is likely to remain murky well into the year.

Federal Updates

UDSA

The U.S. Department of Agriculture (USDA) in late October published its interim final rule for domestic hemp production in the Federal Register.[2]  The new rule includes provisions for USDA to approve hemp plans submitted by states and Indian tribes and also establishes a federal plan for producers in states or territories that do not have their own USDA-approved plan.  The rule went into effect immediately and remains in place until November 1, 2021.

The interim rule makes clear that interstate transportation of hemp is allowed, and that states and tribes may not prevent the movement of hemp even if they prohibit its production within the state.  However, the interim rule did not allude to what kind of documentation would be needed for transporting the hemp (i.e. licensing, testing, certificate of analyses, etc.) and therefore companies should still follow any state-specific transportation requirements.

To wrap up the year, USDA announced that it has begun to approve state and tribal hemp plans including those for Louisiana, New Jersey, and Ohio.  Several plans are currently under review, the status of which can be accessed on UDSA’s website along with the approved plans.[3]

FDA

Following the 2018 Farm Bill, FDA announced it still considers food and supplements containing CBD to be unlawful.[4]  However, FDA does not appear to object to the use of CBD in cosmetics provided the product is otherwise safe and in compliance with all other laws and regulations.[5]

In April, FDA held a public hearing and announced a request for comments to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.[6]  In July FDA provided an update noting that it understands the importance of communicating clearly its approach to CBD, and that it was continuing to listen to stakeholders providing data on the safety and long-term use of CBD.[7]

In October FDA and the Federal Trade Commission continued to issue warnings to CBD companies making unsubstantiated claims.[8]  Furthermore, the agency apparently was not satisfied with the amount or quality of safety information presented by industry as the agency in November released a statement indicating that it still had significant concerns regarding the science, safety, and quality of products containing CBD. [9]  At the same time FDA announced it had issued 15 more warning letters, bringing the year total to 22, to companies for illegally selling products containing CBD, which continued to focus on products with disease claims.[10]

Congress

Throughout 2019, Congress continued to put pressure on FDA urging the agency to develop a pathway for the lawful marketing of hemp derived-CBD products.  The latest of such letters was sent by twenty-six house members in September asking FDA to provide clarity for CBD-containing food and dietary supplement products.[11]

Senate Majority Leader Mitch McConnell also pushed the Senate Appropriations Committee to incorporate into an agriculture spending bill report language that directs – but does not require – FDA to issue enforcement guidelines for hemp-based CBD products, which was eventually incorporated in the final appropriations approved by Congress.[12]  However, proposed language to legalize CBD in food and dietary supplements did not make it into the final appropriations bill.

To end the year, the Senate also confirmed Stephan Hahn as the new commissioner of FDA.  During the Senate hearings Hahn was questioned on the regulatory status of CBD and did not appear to stray from FDA’s current stance, citing concerns that the safety of CBD products has not been fully researched.  It is unclear how Hahn will shape CBD policy yet, but it is likely to remain a hot topic for members of Congress.

State Updates

With the lack of federal clarity regarding the legality of CBD-based products, several states enacted CBD specific legislation in 2019.  For example, Maine, Texas, Ohio, and Florida are among the states that have passed legislation allowing for the marketing of dietary supplements containing CBD.  However, other states such as California, Maryland, North Carolina, and Minnesota have adopted FDA’s position while other states like Idaho, Mississippi, and South Dakota have taken a more restrictive approach by prohibiting CBD all together.

Enforcement of CBD products at the state level also varied, with some states such as California and Idaho actively enforcing their policies through seizures and product embargoes while other states choose not to enforce against products marketed in the state that would appear to violate state law.

What to Expect in 2020

With the USDA interim rule finalized, we expect several states already have or will submit their hemp plans to USDA for approval for the 2020 growing season.  This wave of state regulations may bring additional clarification for CBD products in states that have not yet clearly stated a position for the use of CBD in food and supplements.

It’s unclear whether FDA’s position on the legality of CBD in food and supplements will change in 2020, but we expect that FDA will continue to target companies making illegal disease claims or otherwise violating FDA rules.

Notably, FDA’s unsettled position on CBD has created another problem in the market as the end of the year saw a spate of class action lawsuits against CBD companies for a number of issues including allegations for products not meeting label claims such as the amount of claimed CBD, that products labeled as dietary supplements are illegal, as well as “THC Free” claims for products containing trace amounts of THC.

Marketers of CBD products should pay close attention to legislative and enforcement developments at the state level while also closely following the class action lawsuits which are likely to continue into this year.  If FDA continues not to act and the class actions continue to rise, Congress may also try to intervene and could consider legalizing CBD in foods and supplements.

 

[1] Agriculture Improvement Act of 2018, H.R. 2, 115th Cong. (2018).

[2] Establishment of a Domestic Hemp Production Program, 84 Fed. Reg. 58522 (Oct. 31, 2019).

[3] USDA, Status of State and Tribal Hemp Production Plans for USDA Approval, (last visited Jan. 6, 2020).available at https://www.ams.usda.gov/rules-regulations/hemp/state-and-tribal-plan-review.

[4] FDA, Statement from FDA Commissioner Scott Gottlieb, M.D., on signing of the Agriculture Improvement Act and the agency’s regulation of products containing cannabis and cannabis-derived compounds, (December 20, 2018).

[5] FDA, FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD), (last updated Dec. 31, 2019), available at https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-including-cannabidiol-cbd#cosmetics.

[6] Scientific Data and Information About Products Containing Cannabis or Cannabis-Derived Compounds; Public Hearing; Request for Comments, 84 Fed. Reg. 12969 (April 3, 2019).

[7] FDA Press Release, FDA is Committed to Sound, Science-based Policy on CBD, (July 17, 2019) available at https://www.fda.gov/news-events/fda-voices-perspectives-fda-leadership-and-experts/fda-committed-sound-science-based-policy-cbd.

[8] FDA Press Release, FDA, FTC warn company marketing unapproved cannabidiol products with unsubstantiated claims to treat teething and ear pain in infants, autism, ADHD, Parkinson’s and Alzheimer’s disease, (Oct. 22, 2019) available at https://www.fda.gov/news-events/press-announcements/fda-ftc-warn-company-marketing-unapproved-cannabidiol-products-unsubstantiated-claims-treat-teething.

[9] FDA, What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD, (Las Updated Nov. 25, 2019) available at https://www.fda.gov/consumers/consumer-updates/what-you-need-know-and-what-were-working-find-out-about-products-containing-cannabis-or-cannabis.

[10] FDA, FDA warns 15 companies for illegally selling various products containing cannabidiol as agency details safety concerns, (Nov. 25, 2019) available at https://www.fda.gov/news-events/press-announcements/fda-warns-15-companies-illegally-selling-various-products-containing-cannabidiol-agency-details.

[11] Congressional Letter to Ned Sharpless, (Sept. 19, 2019), available at https://pingree.house.gov/uploadedfiles/pingree_comer_cbd_letter_to_fda_9.19.19.pdf.

[12] H.R. 1865, 116th Congress (2019-2020).

 

Suzanne Bassett, associate, Amin Talati Wasserman LLP, advises clients on compliance, enforcement and trasnactional matters subject to overlapping jurisdictions on the FDA, USDA, FTC, and the U.S. Consumer Product Safety Commission (CPSC). Bassett’s experience extends to matters involving the DEA, U.S. Customs and Border Protection (CBP) and various state and municipal agencies.