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With a foundation in advocacy for cannabis legalization built through involvement on University of Washington's campus and with the Washington State Liquor and Cannabis Board, Daniel has positioned himself as a fearless advocate for the cannabis industry.

hemp cbd transport arrestBack in September 2018, I wrote about how important it was for hemp businesses to carefully plan the routes they would use to ship hemp and hemp products, including hemp-derived CBD. This is because some states are hostile towards hemp and do not recognize a difference between hemp and marijuana.

My article was written prior to the passage of the Agricultural Improvement Act of 2018 (“2018 Farm Bill”), which expanded federal law to cover a wider range of commercial hemp activity and gave the US Department of Agriculture (“USDA”) regulatory authority over the cultivation of hemp. With regards to the interstate transfer of hemp, section 10114 (b) of the 2018 Farm Bill states the following:

TRANSPORTATION OF HEMP AND HEMP PRODUCTS.—No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.

In plain english, this means that states and Tribes can’t prohibit hemp or hemp products from passing through their state or territory if the hemp or hemp products were produced in compliance with Section 10113 of the 2018 Farm Bill. On it’s face this provision may look like hemp businesses no longer need to fear state-level enforcement against hemp or hemp products entered into interstate commerce. However, that is not necessarily the case and businesses who hang their hat on section 10114 do so at their own risk.

The problem with relying on section 10114 is that it appears to be contingent on Section 10113 of the 2018 Farm Bill. Section 10113 of the 2018 Farm Bill covers hemp production (which you can read about here). In summary, Section 10113 indicates that the USDA will oversee hemp production at the federal level by approving of state and Tribal plans covering the cultivation of hemp. States and Tribes will submit plans to the USDA for approval. Section 297C of the 2018 Farm Bill requires that the USDA establish its own plan and and issue licenses to cover the cultivation of hemp in states or Tribal territories where that state or Tribe’s plan for hemp cultivation has not been approved.

The USDA has not yet approved of any state or Tribes plan. It also has not created its own plan under Section 297C. That means that any hemp legally cultivated in the US was done so under Section 7606 of the 2014 Farm Bill. The 2014 Farm Bill allows states to implement agricultural pilot programs to research the cultivation of industrial hemp. State departments of agriculture can issue licenses for the cultivation of hemp. Some states have interpreted this to cover commercial activity. However, the 2014 Farm Bill provides no explicit protection for the interstate transfer of industrial hemp.

Returning to the 2018 Farm Bill, Section 7605 (b) of the 2018 Farm Bill extends Section 7606 of the 2014 Farm Bill for one year after the USDA establishes a plan under 297C. That provision is not contained within Section 10113. Section 10114’s prohibition on interference with the interstate transfer of hemp does not reference the 2014 Farm Bill. Therefore, Section 10114’s protection against interference with the interstate shipment of hemp or hemp products may not currently apply to hemp or hemp products currently in transit because they cannot yet be cultivated “in accordance with” Section 10113.

On the other hand, the intent of Congress seems to indicate that hemp and hemp products should be commercially distributed throughout the country. The 2018 Farm Bill changes the Controlled Substance Act (“CSA”) by explicitly removing “hemp” from the definition of marijuana. It also defines hemp as an agricultural commodity that is eligible for federal crop insurance. Additionally, it allows the USDA to license the cultivation of hemp in a state or Tribal territory that does not have an approved plan. Additionally, an administrative law judge has held that products containing CBD derived from 2014 Farm Bill industrial hemp are allowed to be distributed in the US mail. Also, a federal judge in West Virginia recently lifted a restraining order that limited a hemp cultivator from transporting processed hemp to a Pennsylvania lab that would process it into CBD isolate, because “the Court has become increasingly doubtful of the Government’s case on the merits.” This is due, at least in part, to the 2018 Farm Bill’s removal of hemp from the CSA. (A copy of the order is provided by Hemp Industry Daily, which also wrote about the decision here.)

We’ll likely get additional insight into the question of whether companies can ship 2014 Farm Bill hemp across state lines as there is currently a lawsuit pending between Big Sky Scientific, LLC (“Big Sky”) and the Idaho State Police. I’ll provide some additional insight on this case later this week.

For now, the bottom line is that hemp businesses must still carefully consider their shipping plans for hemp and hemp products. Blind reliance on Section 10114 to protect against local law enforcement is ill advised. Until the 2018 Farm Bill is fully implemented by the USDA, states may seize hemp shipments. Hemp businesses should avoid transporting their products through states that show hostility towards hemp. If you have questions about other ways to mitigate the risk of state level enforcement, please contact our regulatory attorneys.

new york cbd
Home of “dietary supplement” CBD.

This post is part two of two on how New York is regulating CBD. 

On Monday, I wrote about the New York City Department of Health’s (“DOH”) recent crackdown on Hemp-CBD in food and how it was consistent with the New York State Department of Agriculture’s (“Department”) FAQs on hemp-derived CBD (“Hemp CBD”). In summary, the Department’s FAQs state that any Hemp-CBD product sold in New York state must be labeled and manufactured as a dietary supplement. Today’s post focuses on the Department’s Template CBD Processor Research Partner Agreement (“CBD Agreement”) which elaborates on the dietary supplement classification.

The CBD Agreement is a research contract between Hemp-CBD processors, referred to as “Research Partners” in the Agreement, and the Department. Its provisions would not bind other actors including Hemp-CBD sellers or Hemp-CBD processors legally operating in other states. However, the CBD Agreement does shed light on what the Department is going to require for Hemp-CBD.

Research Partners cannot process or sell Hemp-CBD as food. A Research Partner must also obtain written approval from the Department if it intends to sell or distribute Hemp-CBD dietary supplements in a form other than “pill, capsule, caplet, tablet, tinctures, droplets or elixir, chewable, or isolate form[.]”

The CBD Agreement expands on how Research Partners, or CBD processors in other states hoping to sell products in New York, can comply with FDA’s dietary supplement standards:

For the purposes of this Research Agreement, products and production methods used shall comply with FDA law, regulation and guidance concerning dietary supplements with respect to the standards for: personnel, facilities, production, process control systems, quality control measures, record retention, packaging, holding and distribution, supply chain management, recalls, returns, complaints and training associated with dietary supplements.

The dietary supplement standards are in addition to THC testing for CBD products. Hemp-CBD intended to be consumed or absorbed into the human body must also be tested under New York’s medical marijuana program for “cannabinoid profile, solvents, pesticides, heavy metals, bacteria and molds.”

The CBD requirements requires that Research Partners must also provide a serving size and applicable warning on the label. According to the CBD Agreement, CBD products shall also include the following information:

  • The list of all pharmacological active ingredients, including and not limited to THC, CBD, and other cannabinoid content over .05%;
  • The CBD product must set forth the servings per bottle/package, the amount of CBD in milligrams per serving and the total CBD content, in milligrams per package, and the maximum recommended daily amount;
  • The list of all solvents (pesticides) used in the cultivation/extraction process;
  • The manufacture date and source;
  • The batch number;
  • The product expiration date, and
  • The following warning, along with an appropriate warning to consult with a physician concerning the product use:

“This product is neither reviewed nor approved by the State of New York; and has not been analyzed by the FDA. There is limited information on the effects of using this product. Keep out of reach of children.”

The CBD agreement also covers reporting, approved extraction methods, and sourcing hemp.  According to the CBD Agreement, the Department may eventually require registration from entities selling Hemp-CBD.

Recently, I wrote about the FDA’s stated position is that Hemp-CBD is not a dietary supplement. As such, the Department’s position is contrary to the FDA’s. The following language in the CBD Agreement requires Research Partners to acknowledge the FDA’s position:

The Research Partner represents that it has sought whatever legal or other advice it believes to be appropriate and is not relying upon the Department’s approval of its research proposal or any other statement or conduct by the Department in connection with the Research Partner’s evaluation of any legal or other risk to which the Research Partner may be exposed in undertaking the project, including, without limitation, the FDA’s position with respect to CBD and dietary supplements.

For CBD Processors in New York, the CBD Agreement must be carefully observed. For CBD Processors operating in other states who wish to sell products in New York, the Department’s position makes things a little more complicated. For example, the FDA has different standards for cosmetic products. CBD Processors may want to argue that they are selling a CBD cosmetic not a dietary supplement. However, if that CBD cosmetic is sold in New York, it must be labeled as a dietary supplement. This may mean that the CBD cosmetic distributor may need to avoid New York or adopt labeling and manufacturing requirements as if the product was a dietary supplement.

Though it may be hard to comply with the Department’s regulations, the FAQs and CBD Agreement at least provide guidance. If you want to sell Hemp-CBD in New York, it must be sold as a dietary supplement, at least for now.

new york cbd
Home of “dietary supplement” CBD.

This post is part one of two on how the State of New York is regulating CBD. 

Last week, New York City’s Department of Health (“DOH”) quarantined a number of edible products that contained hemp-derived CBD (“Hemp-CBD”) and announced that Hemp-CBD would not be allowed in food products in the City. Eater first broke the story, but the crackdown made national news with the Wall Street Journal, the New York TimesNBC, and Fox all publishing stories on the event. It is unsurprising that the DOH action drew such coverage. CBD is massively popular, New York City is the largest city in the United States, and the story is compelling because the DOH actually sent out agents to quarantine products, rather than simply issuing a statement. It seems to be this last point that garnered national attention based on the relative lack of coverage of a very similar story a few months ago.

On December 18, 2018, shortly before the signing of the 2018 Farm Bill, the New York State Department of Agriculture and Markets (the “Department”) issued a series of frequently asked questions (“FAQs“) and a CBD Processor Template Agreement (“CBD Agreement“) that were both focused on Hemp-CBD. Unlike the DOH, the Department did not take any enforcement action. Coverage of the FAQs and the CBD Agreement was sparse. Now that New York City is taking action, it’s time to dig into the state’s position on Hemp-CBD.

The Department oversees New York’s industrial hemp program, which was promulgated under the 2014 Farm Bill. Rather than issuing licenses or permits, the Department enters into research agreements with individuals and companies who wish to process hemp into commercial products. The Department uses a number of template agreements available online. The CBD Agreement applies to processors who wish to create Hemp-CBD products intended for human consumption.

The FAQs and the CBD Agreement make it clear that the Department is intending to treat Hemp-CBD as a dietary supplement. The FAQs state that an individual cannot “sell any item for human consumption that has CBD as an ingredient unless” the two following standards are met:

  1.  The item is produced under the rigorous dietary-supplement standards described in the CBD Agreement; and
  2. The item is properly labeled and packaged for sale pursuant to FDA regulations for dietary supplements.

The FAQs elaborate on its dietary supplement standard:

What is the difference between a dietary supplement and a food product?

No product for human consumption that has CBD added to it can be labeled and marketed as a food. All extracted CBD and CBD products must be manufactured pursuant to FDA dietary supplement standards and must be labeled and marketed as a dietary supplement[.]

What are “dietary-supplement standards” or “dietary supplement GMP”?

The FDA sets three levels of Good Manufacturing Practices (GMPs): one GMP standard for foods, a more rigorous GMP standard for dietary supplements, and an extremely rigorous GMP for pharmaceuticals. Products listing CBD as an ingredient must be manufactured pursuant to the dietary-supplement standards. The dietary supplement GMPs are federal, and are described here: https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/cfrsearch.cfm?cfrpart=111

This section is titled “Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements.” Any product for human consumption that lists CBD as an ingredient must be manufactured pursuant to these dietary-supplement standards.

This dietary supplement classification applies to any “product that is a combination of ready-to-eat food with additional CBD infusions or CBD extracts, such as CBD chocolate syrup or CBD soda or CBD-infused frosting drizzled cookies.” The FAQs also  apply to CBD-Hemp from other states: “products made from industrial hemp that are sold in NYS must meet NYS standards, regardless of where the product is processed or manufactured.”

It should be noted that the Department acknowledges that its jurisdiction over Hemp-CBD is limited. For example, the Department does not require businesses to apply to the Department to add pre-manufactured Hemp-CBD to another product such as a topical or to develop products using CBD is sourced from another state. There is also no requirement to obtain any authorization from the Department to sell Hemp-CBD products. However, if the product is sold anywhere in New York State, it must comply with dietary supplement standards.

You can agree or disagree with the New York City DOH’s decision to start quarantining CBD in food, however, it does seem to be consistent with the Department’s guidance. The Department is a state agency and the DOH is a city agency so DOH’s decision may be a show of deference to the Department.

Later this week, I’ll analyze the CBD Agreement and how it provides additional insight into the state’s position on Hemp-CBD.

washington hemp In light of the recent federal legalization of industrial hemp, Washington lawmakers are taking a hard look at the state’s hemp program. Senators Bob Hasegawa (D) of Beacon Hill, Steve Conway (D) of Tacoma, and Karen Keiser (D) of Kent recently introducing Senate Bill 5719. The stated purpose of SB 5719 is as follows:

Authorize the growing of hemp as a legal, agricultural activity in this state. Hemp is an agricultural product that may be legally grown, produced, processed, possessed, transferred, commercially sold, and traded. Hemp and hemp products produced in accordance with this chapter may be transferred and sold within the state, outside of this state, and internationally. Nothing in this chapter is intended to prevent or restrain commerce in this state involving hemp or hemp products produced lawfully under the laws of another state or country.”

The bill requires Washington comply with the 2018 Farm Bill, which removed industrial hemp from the federal Controlled Substances Act, and which provides for state-and tribe-level programs for the cultivation of industrial hemp. As such, the Washington State Department of Agriculture (“WSDA”) would need to submit a plan to US Department of Agriculture (“USDA”) pursuant to the 2018 Farm Bill. The plan must address licensing, THC testing, enforcement, and a host of other topics required under federal law.

It’s too early to tell whether SB 5719 will ultimately become law, but it’s worth keeping an eye on at this point (and will be covered in our upcoming free CBD Webinar on February 21 at 12:00 PST). Here are some of the key provisions:

Food and Hemp

SB 5719 would repeal Washington’s Industrial Hemp Research Program (RCW 15.120 et seq.) completely. This program was created under the 2014 Farm Bill, which was fairly light on details and limited to hemp cultivation for “research” purposes. Washington’s hemp program is fairly limited and has never really taken off like it has in Colorado, Kentucky, and Oregon. Washington’s hemp law is also confusing thanks to RCW 15.120.020 which prohibits the “production of any part of industrial hemp, except seed, as food, extract, oil, cake, concentrate, resin, or other preparation for topical use, oral consumption, or inhalation by humans[.]” This provision only refers to the production of hemp, not the sale of hemp products, including widely popular hemp-derived CBD (“Hemp-CBD”) products. However, it has also stunted the retail sale of hemp products intended for human consumption under the idea that if it’s illegal to produce hemp for human consumption it is also legal to sell hemp products for human consumption. This would no longer be an issue if SB 5719 passes. However, SB 5719 does come with some ambiguity.

Under, SB 5719 “CBD and CBD products derived from hemp are considered a food product that must be tested and treated in accordance with other agricultural crop derived food products for human and animal consumption.” This could lead to confusion. For example, a Hemp-CBD topical cream would still have to be “tested and treated” as food. That is inconsistent with FDA regulation which treats food and cosmetics differently. Additionally, what does it mean to “treat” something as food? I read it to refer to things like manufacturing, labeling, and storing Hemp-CBD, but I could be wrong.

Licensing and Seeds

The WSDA would issue hemp producer licenses. Current hemp licensees could transfer into Washington’s new program once it’s up and running.  Hemp producers will only be allowed to use seeds listed in SB 5719 or approved by the WSDA. The bill also contains a clever provision that distinguishes seed varieties based on THC percentage. Certain seed “cultivar” (i.e., “a variation of the plant Cannabis sativa L. that has been developed through cultivation by selective breeding”) will be exempt from THC testing. WSDA will have the authority to approve seed cultivar and determine whether THC testing is required. Cultivar that were brought into Washington state before January 1, 2022 so long as “the state has planting, growth, and stability records covering at least three years.”

Even though seeds will be regulated fairly robustly, SB 5719 does not indicate the need for seed-to-sale traceability as the WSDA will not be responsible for determining whether a hemp product was derived from an approved hemp cultivar.

Regulatory Authority

Though SB 5719 is a major overhaul, WSDA would still have authority over hemp in the Evergreen State. Both marijuana and hemp are ways to describe cannabis so it’s natural to wonder what is the LCB’s role in regulating hemp under SB 5719? SB 5719 specifically states that “all rules relating to hemp, including any testing of hemp, are outside the control of the [LCB].” However, the WSDA is mandated to consult with the LCB to establish rules and policies to prevent cross pollination between marijuana and hemp crops. In the event that a documented cross-pollination erupts between two farms growing hemp or marijuana, the farm operating first will be the victor. This first-in-time law would give marijuana farmers a massive upper-hand, at least initially, as Washington’s marijuana program is older and much larger than the hemp program. The WSDA and state lawmakers will undertake a task force for determining the need for crop insurance.

Bottom line

SB 5719, if passed in its current form, would drastically change Washington’s hemp laws. Like the 2018 Farm Bill, it’s a much more commercial friendly scheme. If you agree or disagree with the current version of SB 5719, you can submit comments here.

If SB 5719 becomes law, it will take effect immediately. Given that there are several time-sensitive provisions in the bill, it makes sense to start planning now. We’ll keep an eye on this and other hemp-bills in Washington and other states.

fda hemp cbd red yeast rice

This is the second installment in our series on the Food and Drug Administration (“FDA”) and hemp-derived CBD (“Hemp-CBD”). Our last post focused on the Drug Exclusion Rule, which essentially states that an article cannot be marketed as a dietary supplement if it was investigated or approved as a drug before the article was marketed as a dietary supplement (or food). Today, we’ll take a look at what that use of “before” really means.

Prior Market Clause

A key component of the Drug Exclusion Rule is that the article at issue was not previously marketed before the article was evaluated or approved by the FDA (the “Prior Market Clause”). So what does it mean to “market” a product? Helpfully, the FDA FAQs link to Draft Guidance for Industry: Dietary Supplements: New Dietary Ingredient Notifications and Related Issues (“NDI Guidance”) to provide an explanation of the phrase “marketed as.”

The NDI Guidance, which like the FDA FAQs is nonbinding, elaborates on the idea of “marketing”:

FDA considers ‘marketing’ a dietary ingredient to mean selling or offering the dietary ingredient for sale (1) as or in a dietary supplement, (2) in bulk as a dietary ingredient for use in dietary supplements, or (3) as an ingredient in a blend or formulation of dietary ingredients for use in dietary supplements. A dietary ingredient may be “marketed” by offering the article for sale online or at a retail establishment, listing it for sale in a catalog or price list, or through advertising or other promotion, if the promotion makes clear that the article is available for purchase. ‘Coming soon’ advertisements would not qualify.”

The NDI Guidance goes on to state “[i]n considering whether a substance has been ‘marketed as a dietary supplement or as a food,’ FDA looks for evidence of one of the following:”

1. Evidence that the substance itself was sold or offered for sale in the U.S. as a dietary supplement, dietary ingredient for use in dietary supplements, or conventional food. For example, a catalog listing a product identified as a ‘Substance A supplement’ would establish the marketing of Substance A as a dietary supplement. Similarly, business records documenting that a substance was sold or offered for wholesale or retail sale for use as an ingredient in a conventional food would establish the marketing of the substance as a food.

2. Evidence that the substance was a component of a food or dietary supplement that was sold or offered for sale in the U.S., and that a manufacturer or distributor of the food or dietary supplement marketed it for the content of the substance by, for example, making claims about the substance or otherwise highlighting its presence in the product.  For example, in Pharmanex v. Shalala, the firm marketed lovastatin, a component of its red yeast rice product Cholestin, by promoting the lovastatin content of Cholestin. Merely showing that the substance was present as a component in a marketed food would not be enough to show that the substance was ‘marketed,’ however.”

Red Yeast Rice

The NDI Guidance’s reference to Pharmanex v. Shalala is of note as that case may have a major bearing on Hemp-CBD. Back in April 1997, the FDA issued a warning letter to Pharmanex, stating that it was selling a drug as a dietary supplement. Pharmanex manufactured Cholestin, a dietary supplement derived from red yeast rice intended to promote healthy cholesterol levels. Cholestin contained the substance mevinolin. Mevinolin was chemically identical to lovastatin, the active ingredient in the prescription drug Mevacor. The FDA approved Mevacor back in 1987. The FDA advised Pharmanex that it considered Cholestin to be a drug which could not be marketed without FDA approval. Pharmanex argued that red yeast rice had been used a food ingredient for thousands of years. The FDA was not convinced, ultimately holding that Cholestin containing lovastatin did not meet the definition of a “dietary supplement”  because lovastatin was an “article” that had already been approved as a drug. The FDA determined that Cholestin did not satisfy the Prior Marketing Clause because it did not contain red yeast rice as that product had traditionally been manufactured and marketed. The FDA ran tests on samples of red yeast rice and found small amounts of lovastatin. In the FDA’s view, Pharmanex had manipulated red yeast rice  to increase the lovastatin content and therefore the Drug Exclusion Rule applied.

Pharmanex challenged the FDA’s ruling in district court. The district court set aside the FDA’s decision, agreeing with Pharmanex that the term “article” as used in the FDCA did not refer to a single ingredient in a drug. The Court of Appeals for the Tenth Circuit reversed, holding that “article” could include the active ingredients of approved new drugs, such as lovastatin, which would exclude them from the dietary supplement definition. On remand, the district court affirmed the FDA’s original conclusion that lovastatin was not marketed as a dietary supplement or food before the FDA approved Mevacor as a prescription drug.

Cholestin containing lovastatin is no longer on the market in the US. There are still red yeast rice supplements available but the FDA monitors whether those supplements contain more than the naturally occurring amount of lovastatin.

The Future of Hemp-CBD 

The Pharmanex case could dictate how the FDA treats Hemp-CBD. Hemp contains many active compounds, including cannabinoids like CBD and terpenes. Hemp can be processed in a number of ways, some of which will isolate these active compounds. Chemical extraction methods can isolate these active compounds while removing water, fiber, and other unwanted material.  Alternatively, hemp can be processed without the use of chemicals (e.g., dried flowers; chopped up plant material placed in pellets, etc.).

“Full spectrum” extracts are the extracts that contain a wide array of compounds found in the hemp plant, including cannabinoids and terpenes. Processors can also isolate specific compounds by repeatedly extracting and refining the compound. Epidiolex is an example of a CBD isolate. A CBD isolate generally contains almost no other compounds. In turn, full spectrum extracts contain trace amounts of CBD and their compounds.

Following the reasoning in Pharmanex, CBD isolate may be subject to the Drug Exclusion Rule, but processed hemp, including full spectrum extracts may not due to the Prior Marketing Clause. This is because like Red Yeast Rice, hemp has been consumed as food and medicine for thousands of years. Hemp is not the same as the CBD isolate. The Pharmanex case turned on the an interpretation of the term “article.” CBD isolate is the article that was approved as a drug. Full spectrum extracts and other processed hemp products that contain naturally occurring CBD also may be outside of the scope of the Drug Exclusion Rule by way of Epidiolex. In turn, CBD isolate or processed hemp that had isolated and increased CBD could only legally be sold as drugs.

Though the parallel between Hemp-CBD and red yeast rice are impossible to ignore, there is no gaurantee that the FDA will take the same exact approach. For one, perhaps it can be established that CBD, in its isolated form was marketed prior to the Epidiolex studies being made public. CBD was first discovered by Dr. Roger Adams at the University of Illinois in 1940. However, any marketing of CBD isolate prior to the first Epidiolex investigations in 2014, would have likely violated federal law because the 2014 Farm Bill was not yet in effect, making it illegal under federal law.

However the FDA’s statement following the 2018 Farm Bill included some very interesting language:

[P]athways remain available for the FDA to consider whether there are circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement. Although such products are generally prohibited to be introduced in interstate commerce, the FDA has authority to issue a regulation allowing the use of a pharmaceutical ingredient in a food or dietary supplement. We are taking new steps to evaluate whether we should pursue such a process.”

The FDA Secretary can override the Drug Exclusion Rule by issuing “a regulation, after notice and comment, finding that the article would be lawful under [the FDCA].” The statement also went onto ask for input on the future of Hemp-CBD:

Given the substantial public interest in this topic and the clear interest of Congress in fostering the development of appropriate hemp products, we intend to hold a public meeting in the near future for stakeholders to share their experiences and challenges with these products, including information and views related to the safety of such products.”

We will continue to monitor the FDA for additional updates on Hemp-CBD.

fda dietary supplement cbd hemp

Since the 2014 Farm Bill passed, products containing cannabidiol (“CBD”) derived from hemp (“Hemp-CBD”) have become widely popular and available in a wide range of stores and online. The Food and Drug Administration (“FDA”) has, for the most part, sat on the sidelines. The FDA has occasionally sent out warning letters to Hemp-CBD distributors who made medical claims about their products, but that was it. The days of relative non-enforcement may be over, as the FDA has recently seized Hemp-CBD products.

This two-part series will take a look at how the FDA will regulate Hemp-CBD. Today’s post will focus on why the FDA does not currently view Hemp-CBD is a dietary supplement. Tomorrow, we’ll examine some issues with the FDA’s position and look at how the agency may regulate Hemp-CBD in the near future.

The 2018 Farm Bill makes it explicit that it does not limit the FDA’s authority to regulate consumer products, and the FDA has made clear that it is focused on Hemp-CBD, making an announcement on Hemp-CBD just moments after the 2018 Farm Bill was signed by Trump. FDA’s jurisdiction over products is triggered by the Food, Drug & Cosmetics Act (“FDCA”).

For the purposes of this post we’ll look at the following categories of products under the FDCA and FDA regulation:

  • “Drug” is any article “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals” or  “intended to affect the structure or any function of the body of man or other animals. In addition, anything intended as a component of a drug is also drug.  21 USC § 321(g). The FDA’s jurisdiction is triggered by the intended use oof an item. The FDA determines intended use generally based on claims made by the distributers of a product, which are often uncovered on labeling, advertising, and other promotional activities related to a product. Drugs are tightly regulated by the FDA and subject to pre-approval before being introduced into interstate commerce.
  • “Food” is any “article for use as food or drink for man.” Unlike drugs, which are determined by intended use,  the FDA exerts its jurisdiction over food based on actual use.
  • “Dietary supplement” is a product intended to supplement the diet that contains one or more of the following: (a) a vitamin; (b) a mineral; (c) an herb or other botanical; (d) an amino acid; (e) a dietary substance for use by man to supplement the diet by increasing the total dietary intake; or (f) a concentrate, metabolite, constituent, extract, or combination of any ingredient described in clause (a) through (e). 21 U.S.C. § 321(ff).

Hemp-CBD appears to makes the most sense as “dietary supplement.” After all, it is is a concentrate of a botanical: hemp. Hemp-CBD could also be a food (based on actual use) or drug (based on intended use). The FDA’s warning letters mostly have focused on Hemp-CBD as a drug, but those letters and other statements by the FDA make it clear that the FDA does not believe that Hemp-CBD qualifies as a dietary supplement or food. For today’s post, we’ll focus on the dietary supplement side of things.

Drug Exclusion Rule

There is an exclusion clause in the definition of “dietary supplement” that generally disallows the use of an FDA approved “drug” as a dietary supplement. We will call this the “Drug Exclusion Rule.” The FDCA’s definition of “dietary supplement” excludes any article that is approved as a new drug or has been subject to a publicized Investigational New Drug (“IND”) clinical investigation, unless the substance was marketed in food or as a dietary supplement before the FDA approved it as a new drug or began the IND investigation. The FDA addresses numerous cannabis related issues on its “FDA and Marijuana: Questions and Answers” page (“FDA FAQs”). According to the FDA FAQs, products containing CBD cannot be sold as dietary supplements because CBD has been investigated and approved as a new drug, namely Epidiolex.

Though the FDA FAQs is a nonbinding guidance document, it seems to indicate that the Drug Exclusion Rule applies to CBD, because of the approval of Epidiolex and IND investigations of CBD:

The existence of substantial clinical investigations regarding CBD has been made public. For example, two such substantial clinical investigations include GW Pharmaceuticals’ investigations regarding Sativex and Epidiolex. (See Sativex Commences US Phase II/III Clinical Trial in Cancer Pain and GW Pharmaceuticals Receives Investigational New Drug (IND) from FDA for Phase 2/3 Clinical Trial of Epidiolex in the Treatment of Dravet Syndrome ).”

However, to determine whether the Drug Exclusion Rule applies, the FDA also needs to prove that CBD was not marketed as a food or dietary supplement prior to those investigations, which started in 2014. Check back early next week, when I’ll take a close look at the FDA’s position on that issue, and take a look at how the agency may regulate Hemp-CBD in the near future.

washington marijuana justice
We are glad to Washington opening up with pardons.

Today I’m attending the Washington State Cannabis Summit. This is the 5th Annual summit, but this year is particularly special due to a major announcement by Governor Jay Inslee. During the morning session, Gov. Inslee unveiled the Marijuana Justice Initiative. The Initiative will allow individuals to submit an online petition to Gov. Inslee requesting a pardon for certain marijuana convictions.

To be eligible for clemency under the Initiative, an individual’s conviction must meet the following criteria:

  • It must be an adult conviction for misdemeanor marijuana possession;
  • Prosecuted under Washington state law (RCW), not a local ordinance;
  • The conviction must have occurred between January 1, 1998 and December 5, 2012;
  • It must be the only conviction on a person’s criminal record.

Individuals who do not qualify under the initiative may seek clemency by filing a petition with the Clemency and Pardons Board. 

Gov. Inslee deserves credit here for using his pardon power to address some of the damage done by the war on drugs. The Governor’s office summarized this harm in its press release announcing the Initiative:

For decades, people have faced criminal prosecution for behavior that is no longer considered a crime in Washington. Inslee believes that forgiving these convictions will allow people to move on with their lives without these convictions causing additional burdens on people, their families, their employers and their communities. This is a small step, but one that moves us in the direction of correcting injustices that disproportionately affected communities of color. A successful pardon of a marijuana possession conviction can assist with barriers to housing, employment and education.”

Gov. Inslee’s office estimates that roughly 3,500 individuals will qualify for clemency under the Initiative.

Gov. Inslee made the announcement to a room full of Washington’s marijuana industry stakeholders. This includes marijuana business, owners, lawyers, accountants, regulators, and lawmakers. As the industry develops, it’s important that criminal justice issues remain in the forefront. This Initiative is a good start. Hopefully, in the future this Initiative can expand to encompass more than just 3,500 individuals. Kudos to Gov. Inslee for starting off 2019 with marijuana criminal justice reform.

In a move straight out of the 1984 classic “Repo Man,” Washington regulators are making marijuana edibles really, really boring.

Earlier this year, we wrote about the Washington State Liquor and Cannabis Board’s (WSLCB) decision to effectively ban marijuana-infused candy. The industry pushed back and the WSLCB reevaluated its stance. December 12, the WSLCB issued a new interim policy to “further clarify the procedures and processes for packaging, labeling, and product decisions for marijuana infused edible products.” It lists the following requirements that apply to all marijuana infused edible products and their package and labeling:

  • Only colors and shapes from an approved list on the WSLCB website can be used.
  • A white or cream background with brown or black lettering and up to three accent colors from the approved color list will be provided on the WSLCB website.
  • A percentage or gradient of an approved color counts as one color.
  • A grey or black background with brown or white lettering and up to three accent colors from the approved color list will be provided on the WSLCB website. A percentage or gradient of an approved color counts as one color.
  • A tan or brown background with black or white lettering and up to three accent colors from the approved color list provided on the WSLCB website. A percentage or gradient of an approved color counts as one color.
  • A full color photo or photo in the chosen accent color of the product is allowed.
  • Packaging with a clear window is permitted. Company logos are permitted. Examples of allowable logo displays are available on the WSLCB website.
Exciting stuff. . .

The public can request to add approved color or shapes by submitting a request to labelapproval@LCB.wa.gov. The WSLCB will consider requests on a quarterly basis starting in March 2019. The WSLCB will also further limit the use of marijuana leaves on packaging, prohibiting cartoon leaves as well as marijuana leaves that resemble other brands.

According to a webinar provided by the WSLCB, it’s possible that licensees won’t be required to comply with this interim policy until January 2020. This new policy is going to seriously impact producers and processors, as many companies will have to completely revamp their entire product lines. Though the WSLCB may have good intentions, this additional prohibition comes on the heels of an already massive labeling overhaul and a policy prohibiting any infused-beverage resembling alcohol.

We expect that brands will also have trouble differentiating themselves using only 16 approved colors. Fun stuff.

industrial hemp farm bill 2018
Hooray for hemp!

Today the US takes a major step forward in cannabis reform! The 2018 Farm Bill legalizes industrial hemp, and was just signed into law by President Trump. Industrial hemp will now be treated like an agricultural commodity, not a controlled substance. Our in-depth look at the hemp provisions in this new Farm Bill is available here.

Hemp has been booming in popularity these last few years and this latest development is only likely to do accelerate market growth. This is in large part due to the increased interest in cannabidiol (CBD) derived from industrial hemp. With reform comes regulation. We expect the Food and Drug Administration to start reevaluating hemp-derived food products, cosmetics, dietary supplements, and drugs. It may take some time for the FDA to actually approve a hemp-derived product, but that day is coming a lot faster in light of this Bill. You can read more about cannabis and the FDA here:

As this Bill just passed, we plan to watch carefully how things develop. Will businesses selling Hemp-CBD now be able to obtain federal trademark protections? How long until California rethinks it’s much maligned CBD-FAQs? If industrial hemp is going to be more widely distributed, what does that mean in terms of product liability? Will other states or even the feds follow Indiana’s guidance on Hemp-CBD labeling? Does hemp legalization mean that US companies can finally enter the international cannabis market?

These are just a few of the questions we’ll continue to write about in this new era of legal industrial hemp. And there will be many more. Even with this new legislation, hemp law will always be complicated due to its close proximity to marijuana. The two both come from the cannabis plant after all. Despite the uncertainty, one thing does seem clear: 2019 is going to be the year of hemp!

industrial hemp 2018 farm bill

Update: The 2018 Farm Bill was just approved by the House. It now heads to President Trump’s Desk. 

At long last, it’s finally happening: The 2018 Farm Bill has made it out of conference and been approved by the Senate. It currently awaits approval from the House, which is expected this week. If Donald Trump signs the 2018 Farm Bill before the current legislative session ends on December 21, industrial hemp will be legal under U.S. federal law. Though we still are likely a few years out from full marijuana legalization, it appears that 2019 is going to be the “Year of Hemp” if Washington D.C. can make this happen before the deadline. Now, we’ll turn to the long awaited hemp-related text of the 2018 Farm Bill, as agreed to by the House and Senate. A copy of the full 2018 Farm Bill is available, via the U.S. Hemp Roundtable, here.

Some key provisions of the 2014 Farm Bill remain. “Industrial hemp” still means parts of the cannabis plant, whether growing or not, with less than 0.3% THC on a dry weight basis. Cannabis with more than 0.3% is still considered marijuana and is still classified as a schedule I substance. Additionally, the 2014 Farm Bill’s hemp provisions will continue for a year after the 2018 Farm Bill is signed. That means that the agricultural pilot programs that we know and love will stick around for a little bit longer.

However, the new version of the Farm Bill differs significantly in that industrial hemp is explicitly defined to include “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” of industrial hemp. Technically, this isn’t necessarily a change in the sense that industry stakeholders (including yours truly) have long interpreted the 2014 Farm Bill to make derivatives and cannabinoids from industrial hemp legal. Now that interpretation has been codified into US law.

The CSA will also explicitly exempt “hemp” from the definition of marijuana. That means that the CSA will acknowledge two different types of cannabis, hemp and marijuana. Hemp is an agricultural commodity. Marijuana is a controlled substance. The problems that plague the marijuana industry including the lack of access to banking, bankruptcy, and federal intellectual property protections should no longer impact businesses dealing solely in industrial hemp. This distinction will also likely lead to increased research by the FDA and other agencies, and remove any question as to whether industrial hemp producers are subject to IRC 280e, which prohibits the taking of deductions related to the trafficking of Schedule I or II controlled substance.

The questions of the interstate transfer of industrial hemp is also addressed. Section 10114 of the 2018 Farm Bill states the following:

TRANSPORTATION OF HEMP AND HEMP PRODUCTS. — No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G  of the Agricultural Marketing Act of 1946 (as added by section 10113) [the provisions on industrial hemp] through the State or the territory of the Indian Tribe, as applicable.
This is a major development as the 2014 Farm Bill did not require states to make any distinction between hemp and marijuana. The new provision means that states that don’t adopt an industrial hemp program cannot interfere with the transportation or shipment of industrial hemp. Though this may not go so far as to require each state to allow the sale of industrial hemp or hemp products, including Hemp-CBD, it does prevent states from interfering with the distribution of industrial hemp.

The 2018 Farm Bill also gives Indian tribes the authority to regulate industrial hemp. This is an important change as the Menominee tribe, who’s territory falls within the state of Wisconsin had its initial hemp crop destroyed by DEA agents. A Federal Court ruled that the 2014 Farm Bill required that hemp be cultivated in  compliance with state law and therefore, because Wisconsin had not implemented an agricultural pilot program to research industrial hemp, that the Menominee tribe could not legally cultivate hemp. The 2018 Bill explicitly gives tribes the ability to implement programs allowing the cultivation of industrial hemp.

One of the reasons the 2014 Farm Bill’s hemp provisions have been so murky is that no federal agency was given regulatory authority over hemp. The 2018 Farm Bill addresses this by appointing the United States Department of Agriculture (USDA). The USDA will oversee a state or tribe’s regulatory authority over industrial hemp. The state or tribe will submit a plan to monitor  and regulate the production of industrial hemp and the USDA will have 60 days to review the plans. Plans must track the land where hemp is cultivated, procedures for testing hemp and disposing of non-compliant hemp, and indicate how the state will enforce against violations of the 2018 Farm Bill.

The 2018 Farm Bill covers penalties for violations of approved state or tribal plans and breaks them into the following categories:

  • Negligent Violations occur when a hemp producer unintentionally violates a state or tribal plan for hemp cultivation by failing to provide a legal description of the land where hemp will be cultivated, failing to obtain the required license or authorization from the state or tribe, or produces cannabis with more than 0.3% THC. Producers who commit a negligent violation shall enter into and comply with a plan established by a state or tribe to correct the violation. The corrective action plan must include a date by which the producer corrects the violation and require that the producer periodically report to the state or tribe on compliance for no less than two years. Producers who commit negligent violations will not be subject to criminal or civil enforcement action beyond agreeing to submit to a corrective action plan. However, if a producer commits three negligent violations within a five-year window
  • Other violations occur when a hemp producer acts with a “culpable mental state greater than negligence.” Other violations could cover things like intentionally growing THC-rich marijuana under the guise of industrial hemp or completely disregarding the industrial hemp rules. Other violations will be referred to the Department of Justice or the “chief law enforcement officer of the State” where the industrial hemp is grown.

The 2018 Farm Bill will prohibit “any person convicted of a felony relating to a controlled substance” under state or federal law before, on, or after the date when the Farm Bill passes to produce hemp under the 2018 Farm Bill or participate in a state or tribal hemp program for a period of 10 years following the date of conviction. This prohibition will not apply to any person lawfully growing hemp with a license, registration, or authorization under a 2014 Farm Bill agricultural pilot program prior to the 2018 Farm Bill enactment. In addition, anyone who makes a false statement on an industrial hemp application will also be banned from the industry.

Finally, the 2018 Farm Bill would also extend federal crop insurance coverage to industrial hemp, meaning that the feds will actually insure a cannabis crop. Hemp producers can also apply for USDA certification and grants, as with other agricultural commodities.

Expect us to write more on this in the near term. This is an important day in the history of cannabis reform and will have a major and positive impact on the cannabis industry.