CBD In 2020: What Are The Current Laws And What Changes Should We Expect?

The 2018 Farm Bill, signed into law in December 2018, legalized hemp and hemp-derived products (including CBD) by removing them from the Controlled Substances Act.  This has the effect of allowing for the possession, production and sale of hemp and its derivatives under certain regulated conditions.  However, the sale of food products and dietary supplements containing CBD, as well as the marketing of CBD products with therapeutic claims, remain illegal under federal law.

This remaining illegality is confusing to many 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 the ongoing efforts of lawmakers to develop a regulatory pathway allowing for the lawful sale of such products across the nation.  This post is by no means intended to be a comprehensive overview of all laws and regulations that a CBD seller 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 from the leaves, resin, or flower of cannabis plants.  Cannabis plants contain approximately 113 different cannabinoids, including CBD and tetrahydrocannabinol (THC). 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 products, supplements, 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 lawThe 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).

The 2018 Farm Bill also establishes a framework allowing for the cultivation, processing, possession, and sale of hemp and hemp derivatives, including hemp-derived CBD.  At the same time, however, the legislation explicitly preserved the FDA’s authority to regulate products containing cannabis or cannabis compounds (irrespective of whether they are derived from hemp or marijuana) under the Federal Food, Drug, & Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act.

Immediately after the 2018 Farm Bill was passed, there was widespread confusion in the marketplace as nobody knew whether or not hemp-derived CBD products may be legally sold.  To quell some of this initial confusion, the FDA immediately released a statement explaining that the agency treats CBD products the same way it treats any other FDA-regulated products, meaning that “they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance.”  The FDA’s statement also explained the agency’s position that it remains unlawful under the FD&C Act to introduce food containing CBD into interstate commerce or to market CBD as dietary supplements, regardless of whether the substances are hemp-derived.

As discussed further below, the lingering illegality of hemp-derived CBD is due to the fact that CBD is now considered an active ingredient in an FDA-approved drug that has been the subject of substantial clinical investigations.

Epidiolex – A 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, 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 substance intended for other non-approved therapeutic uses or treatments.

DEA De-schedules Epidiolex 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.

The de-scheduling of Epidiolex 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.  The de-scheduling means that prescriptions for Epidiolex, like other non-controlled medications, will be valid for one year and can be easily transferred between pharmacies.  Further, physicians will now be able to prescribe Epidiolex free of state prescription drug monitoring program requirements.

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.

CBD In Food Products

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 (i) 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 (ii) 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.  

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,” and the introduction of adulterated food into interstate commerce is prohibited.  (21 U.S.C. §§ 331(a), 342(a)(2)(C)(i)).

Marketing CBD Products With Therapeutic 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.”   This is because a product meets the definition of “drug” under the FD&C Act if it is 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).

Further, 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 sold in 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.  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 or dietary supplements with CBD.

In late February 2020, the FDA revealed that it does not have any plans to pull CBD products from the marketplace on a large scale.  This was revealed during a speech by FDA Commissioner Stephen Hahn in which he acknowledged that Americans see value in these products and that it would be “a fool’s game” to pull them off 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 clarity on its regulatory approach.  The Congress members’ letter also pressed the FDA to speed up its development of regulations allowing for food and dietary supplements containing hemp-derived CBD.

Following this letter, lawmakers exerted even more pressure on the FDA.  In December 2019, Congress 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 the 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 yet been made in terms of developing a new regulatory framework.  The update explained that the FDA remains concerned about potential safety risks to consumers and wants to evaluate more clinical research and toxicity concerns regarding CBD.  The update also 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 product mislabeling, the contamination of products with pesticides, heavy metals, and high levels of THC, and the marketing of CBD products with unsubstantiated health claims.

The key safety questions the FDA currently seeks to address are:

  1. What happens if you use CBD daily for sustained periods of time?
  2. What level of intake triggers the known risks associated with CBD?
  3. How do different methods of exposure affect intake (e.g., oral consumption, topical, smoking or vaping)?
  4. What is the effect of CBD on the developing brain (such as children who take CBD)?
  5. What are the effects of CBD on an unborn child or breastfed newborn?
  6. How does CBD interact with herbs and botanicals?
  7. Does CBD cause male reproductive toxicity in humans, as has been reported in studies of animals?
  8. Are there differing safety concerns for use in certain animal species, breeds, or classes?
  9. 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.

Finally, the March 2020 update clarified that the FDA is developing a new enforcement discretion policy, but also warned that the agency will continue to monitor the marketplace and will take appropriate action against unlawful CBD products that pose the greatest risk of harm to the public.

Congressional Efforts

Since the 2018 Farm Bill was passed, a bipartisan coalition in Congress has sought to create a legislative fix for hemp-derived CBD products.  In January 2020, bipartisan lawmakers introduced bill H.R. 5587, which would allow hemp-derived CBD to be marketed in dietary supplements.  The proposed legislation would amend the FD&C Act by removing hemp-derived CBD from the prohibition on marketing approved drugs or drugs subject to substantial clinical investigations as dietary supplements.  Although this legislation has already received broad bipartisan support, at this point it has only been introduced to the House of Representatives and its fate is yet to be determined.

Takeaways

These laws are constantly in flux, and the FDA is releasing updates nearly every month as it actively seeks to develop a new regulatory approach for CBD.  Complicating matters even more, in many states there is a conflict between federal laws governing CBD products and state laws that have legalized recreational cannabis and the sale of CBD products.  While the actual federal statutes that a CBD product violates may vary from product to product, the gist is that in almost all cases it remains prohibited at the federal level.  As this industry remains in its infancy, the FDA is taking a slow and steady approach to establishing the necessary regulatory frameworks for allowing a robust CBD marketplace. 

Given the lack of clarity from the FDA and the evolving nature of its CBD policy, it is important to take care before putting a product out to market.  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.  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. 

Disclaimer: This article has been prepared and published for informational and educational purposes only and is not offered or intended, nor should it be construed, to be legal advice.

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