Here’s what you need to know to navigate the still-grey regulatory landscape of hemp CBD.In 2014, the Farm Bill paved the way for the development of CBD products. At that juncture, the Bill outlined that hemp could be used for research purposes in pilot programs at the university level. This move helped to create a pathway for the legalization of hemp, which took place in December, 2018, when the Farm Bill removed hemp and hemp seeds from the Drug Enforcement Administration’s schedule of Controlled Substances (the banned substance list), making hemp a legal crop. As a result, hemp-derived products, including textiles, personal care and hemp-derived CBD products are now technically legal in all 50 states. But it’s not quite so black and white. When it comes to CBD, it is important to note that it is only hemp-derived CBD products that are legal. Marijuana-derived CBD, or CBD products derived from other plants in the cannabis family are not currently legal, even if they have a THC count lower than 0.3%. The sale of marijuana-derived products continues to be illegal at the federal level.
While hemp is legal, there still are many gray areas around the sales of CBD products. The Food and Drug Administration has the authority to rule on how to regulate CBD sales as a food and supplement. To date, a final ruling from the FDA as to how CBD can be used and sold has yet to be made. This means the complete rules of the game of what retailers can sell on shelf have yet to be established.
A key limitation with adding CBD to food or supplements is that CBD has already been approved by the FDA to be used as a drug, namely Epidiolex, which is made from a purified form of CBD and was created and approved to treat seizures caused by two rare forms of epilepsy. The FDA’s Drug Exclusion Rule outlines that if an ingredient has been approved as a drug then it is not allowed to be used in food or dietary supplements and marketed as having health benefits unless it was already marketed as such before the drug was approved. This means that companies making hemp-derived CBD products, cannot make any drug/disease treatment claims like the kind pharmaceutical drugs make. To date, the FDA still has not made a ruling on how hemp-derived CBD can be sold or used. The former commissioner of the FDA, Scott Gottlieb, who held his position when the Farm Bill removed hemp from the controlled substance list in 2018, but who subsequently resigned in 2019, advised companies to exercise discretion in marketing products and to not make any “over the line claims” as to what a product can do. The primary warning letters that the FDA has sent out to date are to companies making such claims.
Early on, two assumptions were made about the sales of hemp-derived CBD products. The first was that because Epidiolex is made from a purified form of CBD—the purest form of CBD that has been split (or isolated) from the other compounds of the cannabis plant—the FDA would likely be more open to allowing full-spectrum or broad-spectrum CBD products to be sold in the non-pharmaceutical marketplace. Broad-spectrum CBD utilizes the full spectrum of compounds from the cannabis plant and then refines the product down to remove all THC compounds. Full spectrum also utilizes all of the cannabis plant’s beneficial compounds, but can contain trace amounts of THC, yet not more than the allowed 0.3%. To avoid being compared to CBD isolate, some companies shifted the wording on labels from “CBD” to say “hemp extract.”
The second assumption was that the FDA is focused on small companies and sales, including the sale of hemp-derived food and dietary supplements. To date, however, the FDA has been more focused on big Pharma. A ruling on the sale of hemp and CBD products will have to include the full marketplace.
Many companies and retailers assumed the FDA would not take issue with the sale of topicals such as lotions, salves, patches and sprays, which are considered to be cosmetics, “…articles intended to be rubbed, poured, sprinkled or sprayed on…or otherwise applied to the human body…for cleansing, beautifying, promoting attractiveness, or altering appearance.” (Soap is classified differently than cosmetics.) Cosmetic products that do not make claims beyond cleansing, moisturizing, hydrating or beautification do not have to attain pre-market approval. Instead, the FDA typically relies on consumer complaints as a means to monitor the industry. This reasoning led companies such as Kroger to announce they would be selling CBD topicals (but not products to be ingested). However, as some CBD topical products have made claims beyond typical cosmetic claims, the FDA is taking issue and restating its position that if any type of benefit or claim is associated with a cosmetic then a product can be identified as a cosmetic and a drug. The FDA recently issued some warning letters to companies selling topicals, stating that in their evaluation the products being offered were drugs, not cosmetics.
The overall message being sent to those selling hemp-derived CBD products is to proceed with caution, which is what large retailers are doing. WalMart for instance is carrying a select offering from just two brands for the time being. Target launched CW Hemp’s oil on Target.com in the fall of 2019, but within a week had removed the products from its site. The site does sell a few topical lotions. To try to bring more regulation to the marketplace, individual states have taken it upon themselves to develop their own laws in relation to sales of CBD products. Three states, Idaho, South Dakota and Nebraska, prohibit the sale of all cannabis-derived products, including medical CBD.
As of the end of November, 2019, the FDA has stated they plan to offer more guidance in the near future. The delayed ruling is in part due to the lack of research available on certain aspects of CBD usage, such as toxicity. It is recommended that retailers and companies with questions about hemp-derived CBD product development, sales and marketing should seek legal guidance from an expert in the field while also staying abreast of any FDA rulings or commentary on CBD at FDA.gov.
With so many products on the marketplace, to date, the FDA has focused primarily on calling out products making egregious marketing claims. New Hope’s Hemp Product Connect (HPC) standards department also will be looking for these “over-the-line” claims. In doing so, HPC can help to serve as a database to vet and promote products that are compliantly marketed. Retailers can use HPC as a reliable source to reduce the risk of stocking products that might gain negative attention from the FDA. It is imperative that retailers vet quality products in order for consumers to get what they think they are paying for and for the industry to maintain its integrity.