Who Wants To Play CBD Whack-a-Mole?
Gary Michael Smith Esq. | © 2020
***IN JANUARY 2020, I PUBLISHED AN ARTICLE ON CBD REGULATION IN GREEN ENTREPRENEUR. THE PUBLISHER’S FORMAT UNAVOIDABLY IMPOSES WORD LIMITATIONS. SO I FIGURED TO SHARE THE FULLER UNEDITED VERSION WITH YOU***
CBD was a hot ticket in 2019. Heck, in 2019 CBD even got your mom starting to say something nice about marijuana. By all appearances, CBD is set to have an even more exciting 2020, as the FDA and “the industry” set themselves up to play another round of America’s new favorite game, CBD Whack-A-Mole. Even though the game is nothing short of fait accompli (in FDA’s favor of course) it is still always exciting to watch to see if the CBD mole can dodge FDA’s mallet just one more time.
How did this game get started? You might want to blame medical marijuana, because it gave CBD its start. Really though, its hemp’s fault. Hemp returned to America’s farms after decades of prohibition, and hemp-derived CBD, with its ability to avoid most of the regulatory trappings of medical marijuana, rocketed to prominence. Since late 2018, CBD has been en vogueand CBD retail stores have been popping up with an omnipresence to rival Starbucks.
Erroneously, many in the CBD industry equated hemp’s return to legality with hemp’s byproducts sharing that same status. Small wonder there is confusion, because through the end of 2018, the Drug Enforcement Agency (“DEA”) was saying one thing, the Food and Drug Administration (“FDA”) another, and Congress’ passage of the 2018 Farm Bill had an effect like opening a window adjacent to a table of loose papers on a windy day.
At the start of 2018, the DEA held to the argument that hemp and marijuana were the same thing and that all marijuana extracts, psychoactive or not (I’m talking to you, CBD), were illegal.
Come June 2018, the DEA issued a clarifying statement that it was going to acknowledge a distinction between THC and CBD; the DEA was still going to regard all extracts from marijuana as Schedule 1 narcotics (CBD included); and the DEA would not regard CBD derived from hemp as the same thing as CBD derived from marijuana. The DEA’s stance at this point was that even though it was the same chemical, where you sourced your CBD mattered. What forced DEA’s hand was FDA’s approval on June 25, 2018 of Epidiolex, the nation’s first scheduled CBD drug.
By September 2018, the DEA issued a memorandum announcing that drugs including CBD with THC content below 0.1% would be rescheduled from Schedule 1 to Schedule 5. Rescheduling allowed CBD medicines such as Epidiolexto be sold through traditional pharmacies with a doctor’s prescription.
The DEA’s September 2018 re-classification of CBD to Schedule 5 meant that the DEA still failed to distinguish CBD products derived from lawful hemp as being exempted from DEA’s authority. Yet, few in the industry took note.
Then, courtesy of the Agriculture Improvement Act of 2018 (aka the “2018 Farm Bill”), on December 20, 2018, the federal government altogether removed “industrial hemp” and all derivatives of cannabis with less than 0.3% THC – including CBD products – from the Controlled Substances Act. To some in the industry, they thought this meant that CBD products were no longer an inherently illegal substance under federal law, so long as they contained less than 0.3 percent THC. They were wrong.
So, CBD derived from hemp became legal, right? No. WHACK!
In wake of the 2018 Farm Bill, the FDA issued its own clarifying statement in December 2018. Per the FDA, it remains illegal under federal law to introduce into interstate commerce CBD products that are “marketed with a claim of therapeutic benefit, or with any other disease claim,” without the product first having been “approved by the FDA for its intended use.” This rule also applies to any other product marketed as a drug for human or animal use. Basically, same as all those “secret formula herbal diet pills” you see advertised on late night TV, hemp products (such as CBD) that make health claims must acquire FDA approval for human or animal use before they are marketed in the U.S.
So long as I don’t make health claims, I can sell CBD-infused products? No. WHACK!
In that same December 2018 clarifying statement, the FDA explained FDA’s basis for regulatory authority over CBD. In a hat tip to Epidiolex, then-FDA Commissioner Scott Gottlieb, M.D. cited that there was now a scheduled CBD drug and reminded that it remained illegal to add CBD to any food products:
“Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.”
So many players took to the field and so much money got invested in CBD in 2019, it must be OK, right? No. WHACK!
In May 2019, the FDA held its first hearings on CBD. Although not much resulted from the CBD hearings, current FDA Director, Dr. Ned Sharpless, did make things unambiguously clear that FDA intends to regulate cannabis-derived medicines and food additives. Whack!
Come November 2019, FDA sent CBD-related cease and desist letters to fifteen more companies. Whack! Whack! Whack! Whack!
FDA is polishing its mallet for 2020. In addition to the raft of cease and desist letters it issued in 2019, FDA also issued at the end of 2019 an amended Consumer Update detailing safety concerns over CBD products. Once again making clear its intention to regulate CBD, FDA explained the health concerns surrounding unregulated CBD use, including irreversible liver damage and impacts on male fertility including testicular shrinkage. Whack! Whack! Indeed, by June 2019, the news was widely reporting on a study that linked concentrated CBD use to liver damage.
Giving further credence to FDA’s side of the argument, the vape pen crisis at the end of 2019 did CBD no favors. Class action lawsuits have commenced, and local law enforcement has begun to aggressively crack down on illicit vape cartridges being produced by clandestine extractors operating outside of state-lawful channels. Although appearance are that the use of certain Vitamin E in the cartridges may be the culprit in multiple deaths and damaged lungs, the Centers of Disease Control is still investigating.
It looks like the CBD mole might lose in 2020. But don’t worry. If you thrive off the amusement, you don’t need to rely solely on cannabinoids like CBD. The sexy world of terpenes may be next mole to face down the mallet.
Gary Michael Smith is an attorney and arbitrator and founding member of the Phoenix Arizona-based Guidant Law Firm. He is also a founding director and current president of the Arizona Cannabis Bar Association, board member of the Arizona Cannabis Chamber of Commerce, and contributing author to GreenEntrepreneur.