Congressional hearings on the status of CBD hearings were scheduled for April 2019 to discuss the path forward for the regulatory regime surrounding hemp products under the Farm Bill. With a new major shift at the Food and Drug Administration (FDA), that plan might be delayed.
Scott Gottlieb has been described as one of the most active FDA commissioners in recent memory… and he just resigned for unknown reasons.
Before stepping down from office, Gottlieb stated position on CBD was that it is clearly a drug based on the introduction of Epidiolex, a epilepsy treatment based on CBD isolate. The FDA is clearly opposed to open distribution like what’s happening in the market right now.
FDA authority covers anything put in food, whether it’s cannabis edibles or CBD edibles. The only exceptions are these states that have carved out their own cannabis programs, but those still aren’t recognized as legal under federal law.
Under Gottlieb, FDA took a relatively aggressive stance to make sure they maintained authority over these substances.
Overall though, FDA is not pro or against cannabis. They’re simply pro-regulation. They are not going to give any approval to anything that has not been vetted by their regulatory regime.
This really depends on why Gottlieb stepped down, and whether it was a policy issue or not. There have been no solid rumors or leads on who might be the next FDA Commissioner.
This whole sudden changing regime could have a major impact on the cannabis markets and how companies go about selling their CBD and hemp products under the Farm Bill.
The markets initially reacted negatively, because the whole process of getting CBD and hemp products to market faster is determined by what is approved by FDA under their regulatory umbrella.
However for the time being, FDA is in limbo with Gottlieb gone, after he promised CBD hearings in April. Now there’s a wave of uncertainty in the market about what’s going to happen.
What we find from other industry attorneys though, as well as discussions with FDA, is that they are moving to regulate CBD. They will eventually have the hearings that will allow it to become a dietary supplement.
But that is going to be a long process. It’s going to take hearings. It’s going to take FDA proposing regulations. It’s going to take more hearings, public comment, confirmed regulations in place, then more public comment, and maybe political action before CBD is finally settled.
With uncertainty now at the top, it’s just going to slow down the process for regulatory approval of cannabis products.
With the new changing of the guard at FDA, we are likely to see lax enforcement related to CBD and hemp for the next couple years. There is a lot of regulatory uncertainty that needs to be flushed out.
Until then, CBD brands and sellers will need to abide by overarching regulations for supplements, and keep a low profile to stay out of FDA’s peripheral vision.
The bigger risk for CBD companies are lawsuits due to misleading claims or marketing for CBD products.
They can shut them down.
They can take their products off the shelf
They can fine them.
They can also just send warning letters.
They sent warning letters to 3 companies in 2015 and local offices have conducted enforcement actions in a few cases.
In California — for example — state counterparts to the FDA are beginning to issue notices that CBD companies are in violation of FDA regulations. So they haven’t done too much on the enforcement level.
In the meantime, what you have is a marketplace that is trying to comply with the other two avenues of getting hemp products to the market. Those are the new dietary ingredient path and the generally recognized as safe path.
One option for compliance is the new dietary ingredient (NDI) path. Dietary ingredients are regulated differently than food.
You are required to comply with different standards and different ingredients to qualify as dietary ingredients rather than qualify as food.
This is where you do your own research on your own limited ingredient, including your own dosage and frequency requirements.
Then you perform your own substantial research to determine whether the ingredient is safe. FDA looks everything over, and if they have no objection you can go to market.
The beauty of that approach is that you become the only one able to go to market with that particular ingredient. So if you can get the rigorous process your company now has a monopoly on that particular ingredient.
However, if you think about dietary ingredients, you’re thinking about vitamins, herbal supplements, other ingredients that you’re taking… but not food.
So CBD can’t be sold as food under current FDA regulations that cover all food sold in the United States.
The supplement market is controlled by law that says anything in the market before 1994 that was generally recognized as safe should be allowed to continue being sold as a dietary supplement.
That hasn’t yet applied to CBD or hemp products because there has been no GRAS notice filed with the FDA by any manufacturer of CBD.
There are some companies trying to get to market and comply with the law by filing a GRAS notice. This is generally recognized as a safe notice to show that their products have undergone testing, and they’ve determined under the standards of FDA that these qualify as ‘generally recognized as safe.’
FDA doesn’t have any position here yet, which is why no companies have officially filed it yet. This means, for the time being, CBD cannot be sold as a supplement within current FDA regulations.
CBD companies should turn their attention towards avoiding lawsuits from claims made to the consumer about their products.
This means assessing your entire process about how the product is made and what is used in the product. It also includes how you present the product to consumers and how you advise people to use the product.
It’s recommended to have your attorney review your process for any factors that could lead to legal risk down the road.
Jared Coleman is an attorney practicing law in California in the area of botanical supplements, including hemp and CBD. Mr. Coleman represents companies that are raising money, as well as structuring their business strategy for compliance with federal law.
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