July 27, 2020

Forbes Article on Canopy Growth

Both consumers and members of the industry have been eagerly waiting for the FDA to provide clarity as to the regulatory future of Cannabidiol, more commonly known as CBD. This overwhelming public interest has translated into substantial, bipartisan political pressure at the highest levels of government. Both the Senate Majority and Minority Leaders have made legislative efforts to push the FDA to clarify its enforcement discretion with respect to CBD.1 While the FDA has made it clear that the agency has no plans to ban CBD products,2 companies in this space continue to be at risk from federal enforcement actions unless a major change from the FDA, such as a rulemaking, or legislative action occurs.

Last week, stakeholders were given their first major win when the FDA submitted new CBD enforcement guidance to the White House Office of Management and Budget for review. In March, the agency had announced that the “FDA is currently evaluating issuance of a risk-based enforcement policy that would provide greater transparency and clarity regarding [the] factors the FDA intends to take into account in prioritizing enforcement decisions.”3 The review of these tentative enforcement policies came just days after the release of the FDA’s guidance for clinical research on CBD.4 In the case of this earlier guidance, the White House review took less than a month and the guidance document was released upon completion, signaling that the general public may soon be able to see this newest guidance on enforcement as well.

Legal Background 

Although hemp was given a legal avenue to market through the 2018 Farm Bill, that piece of legislation preserved the FDA’s authority to regulate hemp under the different classifications of the Federal Food, Drug, and Cosmetic Act (FFDCA) and as a biological product under 42 U.S.C. §262.5 As opposed to a singular body of rules, the FFDCA encompasses several smaller regulatory frameworks which treat substances differently depending on their legal status under the statute. These legal designations include food, drugs, dietary supplements, and cosmetics among others. Most relevant to CBD is the definition of a drug, which refers to “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and “articles (other than food) intended to affect the structure or any function of the body.”6 As most CBD products are marketed for health or wellness purposes, they fall under the stringent regulatory framework for drugs. To date, the FDA has only approved one CBD-based drug, Epidiolex, as a treatment for severe epilepsy.7 While the approval of Epidiolex was a milestone, it also complicated the path to market for other CBD products. Under the FFDCA, any approved drug cannot be sold as a dietary supplement.8 Taken in conjunction with the prohibition on adding approved drugs to food, these provisions of the FFDCA make it effectively illegal to sell CBD in most kinds of products.9 Although cosmetic ingredients do not usually require pre-market approval, they are subject to their own regulations which may disqualify the use of CBD and, of course, all topical CBD products intended to affect the structure or function of the body are still drugs.10 To summarize, as the law currently stands, most CBD products on the market today are not in compliance with Federal law; however, the FDA has so far taken a path of compromise with stakeholders through their reserved use of enforcement actions against CBD companies.

Current Enforcement Measures

Although the FDA has been at the center of a blizzard of discontent from consumers, industry and politicians when it comes to the regulation of CBD, the agency has been relatively tolerant of companies operating in the sector. Rather than bringing widespread legal actions against the industry, the agency has chosen mainly to target its enforcement efforts to those companies selling snake oil remedies, those deceiving consumers, and those which pose a danger to the public. Since 2015, the FDA has been sending warning letters to CBD companies attempting to market their products as medical treatments and companies selling products that do not contain the amount of CBD advertised.11 In the past, the FDA has clearly expressed that it has no tolerance for outlandish medical claims in particular, and will take the necessary enforcement measures to prevent this offense.12

Although details on the new enforcement guidance are sparse, it is more likely that the new policy will reflect the FDA’s pattern of enforcement exhibited over the past several years rather than remaking the agency’s enforcement strategy from the ground up. The agency has stated the enforcement policy will be “risk-based,” meaning that the FDA will continue to use its authority to sanction companies posing the greatest risk to consumers. While the issuance of more specific guidance is always welcome from regulators, in this case, the new guidelines may simply continue the FDA’s ongoing mission to reinforce a baseline standard for good business practices that many operators may already be meeting.

Future Developments

The possible release of new enforcement guidelines outlining in greater detail the conditions under which the FDA might bring enforcement action is the first major development that could help industry members market responsibly as they wait for a more permanent solution to the current legal limbo. That solution will either come in the form of an administrative rulemaking or legislative action that would allow CBD to be sold as a dietary supplement. Currently, the FDA is “actively evaluating” such a rulemaking, which would provide a full legal means of marketing CBD under the FFDCA.13 However, the rulemaking process is a lengthy one, which means that the current state of affairs will remain for the foreseeable future unless legislative action occurs. This January, a bipartisan bill was introduced aiming to reclassify CBD as a dietary supplement and seeing as CBD has enjoyed consistent support on Capitol Hill so far, this effort or a similar bill may become law before an FDA rulemaking process is complete.14

For now, all CBD business owners operate at the risk of an FDA enforcement action. In this regulatory climate, ensuring that every CBD product sold is of the highest quality and unadulterated, that the amount of CBD in the said product is adequately represented, and that there are no claims of medical benefit associated with the marketing of CBD are always best practices. There is little doubt that all of these factors will feature in the forthcoming enforcement guidance, and so adhering to them early will help to mitigate risk and ensure the safety of consumers.

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

  1. Kyle Jaeger, “Chuck Schumer Urges FDA to Quickly Issue CBD Rules,” Marijuana Moment, October 25, 2019, https://www.marijuanamoment.net/chuck-schumer-urges-fda-to-quickly-issue-cbd-rules/.
  2. Kyle Jaeger, “Banning CBD Products Would Be ‘A Fool’s Game,’ FDA Chief Admits,” Marijuana Moment, February 27, 2020, https://www.marijuanamoment.net/banning-cbd-products-would-be-a-fools-game-fda-chief-admits/.
  3. U.S. Food and Drug Administration Report to the U.S. House Committee on Appropriations and the U.S. Senate Committee on Appropriations: Cannabidiol (CBD) Report in Response to Further Consolidated Appropriations Act, 2020. Page 13.
  4. Kyle, Jaeger, “FDA Submits New CBD Enforcement Guidance to the White House for Review,” Marijuana Moment, July 23, 2020, https://www.marijuanamoment.net/fda-submits-new-cbd-enforcement-guidance-to-white-house-for-review.
  5. 7 U.S.C.A. § 1639r(c) (West 2018).
  6. 21 U.S.C.A. § 321(g)(1) (West 2016).
  7. Food and Drug Administration, “FDA Approves First Drug Comprised of an Active Ingredient Derived from Marijuana to Treat Rare, Severe Forms of Epilepsy,” press release, June 25, 2018, https://www.fda.gov/news-events/press-announcements/fda-approves-first-drug-comprised-active-ingredient-derived-marijuana-treat-rare-severe-forms.
  8. 21 U.S.C.A. § 321(ff)(3)(B) (West 2016).
  9. 21 U.S.C.A. § 331(ll) (West 2018).
  10. FDA, Report in Response to Further Consolidated Appropriations Act, 2020. Page 11.
  11. “Warning Letters and Test Results for Cannabidiol-Related Products,” U.S. Food and Drug Administration, accessed July 27, 2020, https://www.fda.gov/news-events/public-health-focus/warning-letters-and-test-results-cannabidiol-related-products.
  12. Scott Gottlieb, “Statement from FDA Commissioner Scott Gottlieb, M.D., on new steps to advance agency’s continued evaluation of potential regulatory pathways for cannabis-containing and cannabis-derived products,” Food and Drug Administration, April 2, 2019, https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-new-steps-advance-agencys-continued-evaluation.
  13. FDA, Report in Response to Further Consolidated Appropriations Act, 2020. Page 9.
  14. “H.R.5587 – To amend the Federal Food, Drug, and Cosmetic Act with respect to the regulation of hemp-derived cannabidiol and hemp-derived cannabidiol containing substances.” Congress.gov, accessed July 27, https://www.congress.gov/bill/116th-congress/house-bill/5587/text?q=%7B%22search%22%3A%5B%22H.R.+5587%22%5D%7D&r=1&s=4.