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    Columns

    Demystifying the Regulatory Status of CBD

    The hype and the legal issues surrounding cannabinoids need context, and you probably need a lawyer.

    Demystifying the Regulatory Status of CBD
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    By Todd Harrison, Venable11.01.18
    With the explosion of interest in products that contain cannabidiol (CBD), now seems like the perfect time to discuss the regulatory status of cannabinoids. This column does not take a position on whether CBD or other cannabinoids should be permitted, from a policy perspective, to be marketed over-the-counter as dietary supplements. Rather, I am posing a series of questions intended to assist companies in determining whether it’s worth the business risk to market these products. So, here we go...

    Question 1: What laws control the use of CBD in dietary supplements?

    Answer: The Control Substance Act (CSA), The Federal Food, Drug, and Cosmetic Act (the Act), the Farm Act of 2014, and finally state laws. Understand, state laws that permit the marketing of CBD products may only pertain to products cultivated, grown. and manufactured within the state pursuant to a permit or license issued by the state. Put another way, a state may prohibit the sale of CBD and hemp extracts that are produced in other states.

    Question 2: Are CBD and other cannabinoids Schedule I controlled substances?

    Answer: The answer to this question turns on the definition of marijuana and whether it is an FDA-approved drug. More specifically, only CBD and cannabinoids that come from the non-resin portion of the plant, including the stalk and the seeds, are exempt from the definition of marijuana and therefore are not Schedule I controlled substances. FDA-approved drugs are Schedule V controlled substances. 

    Question 3: Doesn’t the Farm Act of 2014 essentially de-schedule hemp? 

    Answer: No, it does not. Indeed, the Farm Act of 2014 only permits the growing and propagation of hemp as part of a research project within a state. Even if one could argue that limited commercialization within a state permits the marketing of CBD dietary supplements, it would only apply to that state. For instance, you could not market a CBD dietary supplement that is from the flower or leaf of the plant in the state of Maryland unless the hemp was grown in Maryland pursuant to a permit issued by the state of Maryland. For some reason, this fact remains lost on the industry. Also, if it did allow for the interstate commercialization of hemp and hemp-derived products, the proposed language in the Farm Bill of 2018 de-scheduling hemp would be unnecessary. 

    Question 4: If the CBD in a product comes from the stalk or seed of hemp, can I market it as a dietary supplement or as an ingredient in food?

    Answer: I am not going to be drawn into a debate as to whether it is economically feasible to extract CBD from the stalk or seed of hemp. For our purposes here, we will presume that this statement is true. However, the only practical legal impact is that the product is not subject to the CSA. Similarly, if the source of CBD or other cannabinoids do not come from hemp or other cannabis cultivars, then it is not subject to the CSA.

    However, one must also analyze it under the Federal Food, Drug, and Cosmetic Act. Under Section 201(ff)(3)(B), if the article is marketed as a dietary supplement, it must have been on the marketplace before FDA authorized its investigation as a new drug and substantial clinical trials have been undertaken. This means that CBD and other cannabinoids had to have been marketed prior to GW Pharmaceuticals’ IND for Epidiolex and the start of the clinical trials, which happened in 2007. FDA is on the record in numerous warning letters that it is unaware of CBD’s use in a dietary supplement prior to the IND and institution of clinical trials. 

    Similarly, Section 301(ll) of the Act, does not permit its addition into food if it was not marketed as an article in food prior to the institution of substantial clinical trials. Thus, a Generally Recognized As Safe (GRAS) document produced 11 years after the fact has no legal weight if it cannot be established that CBD was marketed prior to the clinical trials. 

    With that said, Section 301(ll)(2) does allow a company or industry to petition FDA to permit its use in food; so the door is open. The question is whether the industry wants to attempt to petition the agency to permit its marketing in food, which by default would also include dietary supplements. 

    It is important to note the article that was authorized for investigation and subsequent clinical trials is CBD. Cannabidiolic acid (CBDA) and other cannabinoids have not been authorized for investigation or subject to clinical trials. Thus, there is an opening here to market CBDA and the other cannabinoids once the controlled substance issue is straightened out.

    Finally, there are defenses to the preclusion provisions, however, you will need to seek the advice of legal counsel to determine how strong these arguments are, as I do not have the space in this column to go through all the legal arguments. Some of them have merit and pass the laugh test while others are highly suspect. Regardless, this requires you to work through counsel to determine the strength of those arguments. 

    Question 5: Everyone is marketing CBD so it must be legal, right?

    Answer: Law enforcement and regulatory agencies routinely permit the marketing of products that may otherwise be violative through enforcement discretion. Here, I agree, the DEA does not seem very interested and FDA simply needs to make a decision to permit its marketing or enforce. However, while it is high enough on its priority list to merit warning letters, it is not so high (pun intended) to warrant enforcement action, but that is simply reading the tea leaves. 

    With that said, here is something that no one talks about and people refuse to deal with: domestic credit card processors will not knowingly process for companies that are selling CBD because of concerns regarding its controlled substance status. Thus, many of the companies that are processing are not informing the processor that it is for CBD products, which may itself create an entirely different set of legal issues; or they are using expensive offshore processors, which come at a premium. Of course, this is another issue that is simply not discussed but must be factored into any decision to market CBD products.

    Question 6: When the Farm Bill of 2018 is passed won’t it take care of everything?

    Answer: By the time this column publishes, the Farm Bill of 2018 may have passed and it may include language about hemp. However, the Farm Bill of 2018 only de-schedules hemp and products derived from hemp; it does not impact the FFDCA analysis because the language (as it stands as of this writing) makes it clear that nothing within the bill would modify or preempt the FFDCA.

    Question 7: What about topical products?

    Answer: Presuming you can overcome the CSA, the preclusion provisions of the FFDCA do not apply to topical cosmetic products as along as impermissible drug claims are not being made. 
    I hope this column at least places the issues surrounding CBD and cannabinoids in the appropriate context. I am hopeful that in the near future the CSA issue will be placed to rest with the Farm Bill of 2018. I am also hopeful that at some point someone with strong safety data comes forward to request permission from FDA to sell CBD in foods and dietary supplements, as there is a reason we have an endocannabinoid system. Providing it with nutritional support would have significant health benefits completely unrelated to treating rare epileptic seizures.

    As I have stated so many times in columns and speeches, we need to stop treating everything as a binary choice between being diseased or being healthy. In fact, “healthy” encompasses a wide spectrum. Indeed, osteoarthritis, while classified as a disease, is in fact normal wear and tear that we all experience. Yet people are denied access to products that may help them and instead are prescribed opioids; and we have seen what that has wrought on society.

    Companies in the natural product/dietary supplement industry often wonder why regulators don’t seem to trust the industry. However, rushing ingredients into the market on questionable legal theories without following the regulatory process is one reason for this distrust. I understand frustration when it comes to claims, but cavalier attitudes toward regulatory procedures of ingredients pose a more long-term threat to the industry.

    Still, it’s challenging when FDA seems more concerned with “disease” claims related to supporting fertility and age-related joint pain rather than enforcing the dietary ingredient provisions of the Act. But that is simply my take about ingredients in general, and not on CBD in particular.


    Todd Harrison
    Venable

    Todd Harrison is partner with Venable, which is located in Washington, D.C. He advises food and drug companies on a variety of FDA and FTC matters, with an emphasis on dietary supplement, functional food, biotech, legislative, adulteration, labeling, and advertising issues. He can be reached at 575 7th St. NW, Washington, D.C. 20004, Tel: 202-344-4724; E-mail: taharrison@venable.com.
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