Alert December 20, 2018

Congress Decriminalizes Industrial Hemp, but CBD Is Not Yet Out Of The Weeds

Summary

In the late afternoon of December 12, 2018, both houses of Congress passed the $867 billion-dollar Farm Bill (“2018 Farm Bill”), which, among other things, removes industrial hemp and its byproducts from the definition of “marijuana” and from the list of Schedule I substances under the Controlled Substances Act (“CSA”). Earlier today, December 20, 2018, President Trump signed the 2018 Farm Bill into law. Hemp and cannabis advocates have been eager to embrace the idea that if industrial hemp were legalized, as it now has been by the 2018 Farm Bill, then byproducts of the hemp plant – most importantly cannabidiol (“CBD”) – would be permitted for use in food, supplements, and cosmetics. But the 2018 Farm Bill does not go that far.  While its passage means that possession, manufacture, sale, and distribution of industrial hemp and its byproducts are no longer criminal under federal law, the legal and regulatory status of CBD and products containing CBD remains unsettled and unclear. Regulatory issues remain, especially with respect to the use of CBD in food, supplements, and cosmetics.

FDA Oversight of CBD Under the Food, Drug and Cosmetic Act (“FDCA”)

The Food and Drug Administration (“FDA”) is responsible for ensuring the safety and efficacy of drugs and medical devices, the nation’s food supply (human and animal), supplements, and, to a lesser degree, cosmetics.

The FDCA prohibits “adulteration” or “misbranding” of any food, drug, device or cosmetic in interstate commerce, and also prohibits the introduction or delivery of any adulterated or misbranded food, drug, device or cosmetic into interstate commerce. A food is deemed to be adulterated if it contains any substance which may render it injurious to health. It is the FDA’s current position that all cannabinoids, including CBD, regardless of whether they are sourced from hemp or marijuana, are unapproved additives that adulterate food and supplements. The FDA also has refused to grant CBD a Generally Recognized as Safe (“GRAS”) label, which is required for all food additives.  Although hemp seed and hemp seed oil have received a GRAS determination, the FDA has indicated that it believes further research into the safety of CBD as a food additive is warranted. The 2018 Farm Bill does not change these FDA determinations in any way.  

Further, according to the FDA, CBD is a drug – regardless of whether the source is hemp or marijuana – because it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease. Indeed, the FDA has recently approved a CBD-based drug – EPIDIOLEX® – for the treatment of seizures. Since the FDA is and plans to continue regulating CBD as a drug, the product is precluded from being marketed as a supplement.  Again, this is unchanged by the 2018 Farm Bill.

To be sure, the FDA has not moved aggressively against companies selling products in violation of the foregoing regulatory rules. But, the FDA has taken at least some steps to flex its enforcement muscle over CBD. For instance, since 2015, the FDA has sent dozens of warning letters to companies who are or were manufacturing and marketing food, supplements, tinctures, and creams containing CBD, asserting that the products were all “adulterated” or “misbranded.” Further,  the FDA’s Director of Dietary Supplement Programs, Steven Tave, recently reminded the audience at the Council for Responsible Nutrition Conference that no one should be lulled into complacency just because the FDA has not commenced a formal enforcement action against any CBD-based product.  As Tave bluntly put it: “Anyone who thinks [CBD] is lawful is mistaken.”[1] Tave was not talking about criminality, and so the passage of the 2018 Farm Bill does not change the implication of his statement. To the contrary, the 2018 Farm Bill explicitly states that the legalization of hemp shall not have any effect on the FDCA or on the FDA’s authority to promulgate federal regulations and guidelines on the production of hemp.

The 2018 Farm Bill also does not speak to the legality of CBD used in cosmetics. While the FDA does not have the legal authority to approve cosmetics (other than color additives used in most cosmetics) before they are marketed, by law all cosmetics must be safe for consumers when used according to the directions on the label or in the customary or expected way, and all cosmetics must be properly labeled. It remains to be seen whether and how the FDA may regulate cosmetics containing CBD derived from industrial hemp. 

Conflicting State Regulatory Approaches to CBD Derived from Industrial Hemp

Notwithstanding the 2018 Farm Bill’s decriminalization of CBD derived from industrial hemp, state regulations also still need to be considered with respect to hemp-derived CBD products. The 2018 Farm Bill does not preempt or limit state law regarding industrial hemp products, provided the state law is “consistent with” the provisions of the Bill. Specifically, it does not preempt or limit the ability of states to enact laws that “regulate[] the production of hemp” – including CBD derived from industrial hemp – and are “more stringent” than the provisions of the 2018 Farm Bill regarding hemp production. So, states may continue to regulate CBD derived from industrial hemp after the 2018 Farm Bill.

Prior to the passage of the 2018 Farm Bill, the California Department of Public Health (“CDPH”), in keeping with FDA guidance, issued a public statement in response to inquiries from food processors and retailers interested in using industrial hemp-derived CBD oil or CBD products in food within California stating that while “California currently allows the manufacturing and sales of cannabis products (including edibles), the use of industrial hemp as the source of CBD to be added to food products is prohibited.” This prohibition will not automatically be lifted as a result of the enactment into law of the 2018 Farm Bill. 

Likewise, the Iowa Department of Public Health issued a public statement a few weeks prior to the passage of the 2018 Farm Bill noting that sales of CBD products outside of licensed medical marijuana dispensaries (where CBD sales are permitted) are “not…approved under either a federal or state of Iowa regulatory program.” Nothing in the 2018 Farm Bill changes Iowa’s ability to regulate the sales of CBD products, including those derived from industrial hemp, provided it does so consistent with FDA regulations and guidance.    

Simply put, while the passage of the 2018 Farm Bill has created possibilities for the legal use nationwide of CBD derived from industrial hemp, those considering the manufacture, sale and distribution of products containing hemp-derived CBD, whether in brick and mortar stores or through an app or a website, must consider the laws and regulations relating to CBD products in each of the 50 states.     

Conclusion

Although the 2018 Farm Bill de-criminalized hemp and hemp-derived products, such as CBD, those interested in products containing hemp-derived CBD must still consider FDA and state regulatory oversight. Legalization of industrial hemp will not automatically translate into the permissible use and sale of industrial hemp byproducts such as CBD in food, supplements, and cosmetics.  

If you have questions or wish to learn more about the changing CBD, industrial hemp, and cannabis legal landscape, please contact any of the authors of this Alert. 



[1] Stephen Daniells, Top FDA Official: ‘Anyone Who Thinks CBD is Lawful is Mistaken,” NutraIngredients-USA.com (Nov. 6, 2018), https://www.nutraingredients-usa.com/Article/2018/11/06/Top-FDA-official-Anyone-who-thinks-CBD-is-lawful-is-mistaken;