In the latest example of state action on CBD-infused products, California Assembly Bill 45, among other things:
Some details of AB 45 are similar to the policies of other states that explicitly permit the sale of CBD products, and other details are quite different. Notably, AB 45 has drawn criticism from some hemp industry groups in California due to its prohibition on the manufacture or sale of inhalable, or smokable, hemp products in California until the legislature establishes a tax on such products.
The uncertain legal landscape related to CBD-infused food, beverages, and dietary supplements leaves companies in this market navigating choppy waters, contending with detailed state requirements that may be inconsistent with each other and with federal laws and guidance.
Governor Gavin Newsom recently signed California Assembly Bill 45 (AB 45) into law, which, among other things, allows hemp-derived cannabidiol (CBD) to be included in any food, beverages, and dietary supplements sold in California. This is not only a break from California’s prior position prohibiting CBD from being included in such products even as the State began to tax and regulate its cannabis industry, but it is also in stark contrast with the U.S. Food and Drug Administration’s (FDA’s) current position on the issue. Unless and until FDA changes its guidance prohibiting CBD-infused food, beverages, and dietary supplements sold in interstate commerce, laws like California’s will continue to add to a confusing and contradictory regulatory landscape. Thus, food and beverage companies should ensure they carefully monitor state developments on this issue, which may be inconsistent with federal law and guidance.
As we have previously discussed in our Tobacco Law Blog, the Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized “industrial hemp” (a term used to refer to strains of the plant containing less than 0.3% delta-9 tetrahydrocannabinol (THC)) and its derivatives by removing hemp from the list of federally illegal controlled substances. While this watershed law legalizes the production of hemp, and by extension hemp-derived CBD, it does not regulate processed hemp-derived CBD products, such as CBD-infused food and dietary supplements. Rather, the law preserved FDA’s authority to regulate processed hemp products under the Federal Food, Drug, and Cosmetic Act (FD&C Act).
FDA, however, has been slow to act. The agency has not promulgated formal regulations, although it has issued nonbinding guidance, taking the position that CBD is a drug under the FD&C Act and that it is illegal to market CBD in interstate commerce by adding it to food or labeling it as a dietary supplement. FDA has also issued warning letters to CBD companies, but it has not taken significant enforcement action against them. FDA has accepted three generally recognized as safe (GRAS) notices for hulled hemp seed, hemp seed protein powder, and hemp seed oil, but all three of these contain only trace amounts of THC and CBD. While hemp seed oil can be legally marketed in human foods, the high CBD products most commonly seen on the market today use high-CBD oil extracted from the stalks, leaves, and flowers of hemp plants; such oil is not protected by the GRAS notifications.
In response to FDA’s inaction on formal regulation of CBD, Congress is considering legislation that would allow CBD to be used in food, beverages, and dietary supplements and require FDA to establish regulations. The success of the legislation remains uncertain, and states have stepped in to fill the void.
As FDA considers issues related to CBD products, some state governments are endeavoring to substitute their own rules for these products, and Congress is considering steps to reduce or remove FDA constraints. States such as California have passed CBD-related guidance that appears to contradict the FDCA’s ban on the use of CBD in food and dietary supplements. Meanwhile, other states are taking actions to crack down on improper sales of CBD products. For example, last April, New York’s attorney general sent a cease-and-desist letter to a CBD company that claimed its products would help fight COVID-19.
FDA formed a CBD Policy Working Group in April 2019. In the ensuing year and a half, FDA has issued a few non-binding guidance documents related to CBD products—but, citing the need for additional research, no regulations.
The FDCA makes it illegal to sell food or dietary supplements that contain an “approved drug” ingredient without explicit FDA approval. When FDA approved Epidiolex, a CBD seizure medication, CBD became an approved drug ingredient. Although this action makes use of CBD in most products illegal without FDA approval, FDA has not issued a regulation drawing clear lines between approved and unapproved uses of CBD in other products.
In 2018, President Donald J. Trump signed the Agriculture Improvement Act of 2018 into law. Under this law, CBD products containing less than 0.3 percent tetrahydrocannabinol, the compound that produces a “high,” are no longer classified as controlled substances that are categorically illegal under federal law. Instead, the 2018 legislation authorizes FDA to regulate sale of CBD products pursuant to the Federal Food, Drug, and Cosmetic Act (FDCA).
FDA regulation of CBD products faces new challenges as the market develops.
Some studies have concluded that CBD mitigates ailments, including anxiety, insomnia, chronic pain, and addiction to substances such as nicotine and heroin. FDA, however, has warned consumers that CBD can have potentially harmful side effects, such as liver injury. At a minimum, the potential for harm from CBD seems to call for balancing costs and benefits of specific products.
Some members of Congress have introduced bills to address CBD products. Two bills introduced this year in the Senate, the Hemp Access and Consumer Safety Act and the Cannabis Administration and Opportunity Act, and one in the House of Representatives, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021, would change federal regulation of CBD products. The proponents of these bills argue that there needs to be federal legislation or further FDA action to clarify the treatment of CBD products under federal law will be treated.
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Yet it is equally evident that, without regulatory enforcement actions by FDA, the budding market in CBD products will flourish. Those who are producing and selling CBD products and those who seek access to them will likely endeavor to secure favorable changes in law. Even if there are sound reasons for FDA to take more time before adopting regulations for these markets, delay almost certainly will give rise to conditions that make a cautious, product-by-product determination of legality more politically difficult for FDA.