CBD and the FDA
Since it's legalization, CBD has been a largely unregulated area. The confusion which has permeated this rapidly growing field has hindered its growth, threatened businesses and actually resulted in numerous arrests of individuals who thought they were doing nothing more than buying, using or transporting a legal product. Fortunately, there are numerous efforts to bring clarity and regulation to the field of the product and its related drugs, and many of these efforts are originating from the Food and Drug Administration, or FDA.

These efforts are desperately needed. Creating regulations will ensure that there is legal clarity which will protect consumers and businesses alike.

Legislative History

CBD, which must come from industrial-based hemp, was legalized as a result of the 2018 Farm Bill. It is important to note that the Farm Bill defines the product as having less than .3% THC (tetrahydrocannabinol), which is the chemical in marijuana which is associated with the intoxication. The product has no such effects and will not get you high.

It is also important to note that this is a separate product from marijuana and has nothing to do with marijuana which has been legalized for recreational or medicinal purposes. Hemp-based sales of the product is legal in all fifty states, though more than 30 states have regulations on the product, and some of specific restrictions on its use. Marijuana-based product sales are only legal in states which have legalized marijuana for recreational or medical purposes.

Current Legal Status

The Federal Farm bill of 2018 ensured that the product was legalized in all fifty states, though it did give states broad authorities to regulate the growing industry. States can restrict its use and create their own regulations. Depending on the state and its governing structure, localities can also create restrictions which deal with purchase, use or sale of the product.

This legal status is being enforced across the entire Federal Government. For example, in May 2018, the federal Drug Enforcement Agency (DEA) issued an internal directive stating that products containing cannabinoids are legal, as long as their source from which they are produced is a legal one.

CBD and the FDA: A historical overview

The growth of popularity of the product comes from the 2018 Farm Bill. Since its passage, there has been an explosion of interest in the field. However, there has been a complete lack of regulations in on the subject.

That being said, this hasn't stopped the FDA from warning companies when they took claims about the medical benefits of the product too far. In April 2019, the FDA sent out warning letters to three companies, arguing that the medical claims they were making were not supported by the evidence. Specifically, it sent letters to Nutra Pure, PotNetwork Holdings and Advanced Spine and Pain, warning them against making inaccurate claims which stated that the product could provide relief from cancer and Alzheimer's. No such evidence currently exists.

In a joint statement, the Federal Trade Commission (FTC) and FDA said, "According to their advertisements, the products can effectively treat diseases, including cancer, Alzheimer’s disease, fibromyalgia, and ‘neuropsychiatric disorders." They gave the companies 15 days to take specific action to remedy the false claims, and all three companies complied with the directives.

These aren't the first times in which the FDA has acted to address unsubstantiated claims related to the product, related cannabinoids and marijuana. In November 2017, it warned four companies (Charlotte's Web Botanicals, Natural Alchemist, Greenroads Health and That's Natural Marketing and Consulting) to stop claiming that marijuana could cure cancer. In a statement, Dr. Scott Gottlieb (then the head of the FDA) said, "Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors." It is worth noting that the FDA was not demanding the cessation of such sales. Instead, it was requiring that the companies stop claiming that scientific research backed the claim that cancer could be cured with marijuana and the product .

Furthermore, in the aftermath of the 2018 Farm Bill, the FDA released a statement in which it noted it still had the ability to regulate the product. As such, it banned the ability of any manufacturer or processor to add the product to food products.

These two incidents demonstrate the confusion of the entire regulatory scheme when it comes to medical marijuana, recreational marijuana and the product. Cannabinoil is highly unregulated, and marijuana is still considered a controlled substance by the FDA, making it impossible to adequately regulate, test or research/

The FDA has, however, approved the use of Cannabinoil as an active ingredient in anti-seizure medication, finding that enough research existed to support its use. That drug is Epidiolex, and it is used to treat rare and severe seizure disorders.

The Product and the FDA: Recent developments

An FDA hearing in late May 2019 was the first which the FDA held on the topic. It showcased a variety of major concerns within the industry and its current state of regulations - or, more accurately, lack thereof.

According to news reports, more than 100 people testified at the hearing. These testifiers ran the gamut of individuals and businesses within the industry and included both supporters, proponents and industry watchers.

A variety of product-related news was shared at the hearing. While the Farm Bill legalized hemp, it did not specifically legalize the product - instead, it allow for the product to be regulated by the Food and Drug Administration. As a result, the product is currently living in a bureaucratic and regulatory gray zone. This is an unstable situation, as the product is one bad regulation away from being pushed out of existence. It also hinders investment, as those with access to resources and reluctant to invest in an industry where such high levels of uncertainty abound.

The FDA did acknowledge the very real interest in the product and expressed a willingness to find ways to regulate the drug. Medical xPress quoted the acting commissioner of the FDA, Dr. Ned Sharpless, as saying that "critical questions remain about the safety" of the product.

The hearing also noted the massive problems which come with the utter lack of regulation or standards in this field. As noted in the Marketwatch article in the subject, the current state of the industry is "messy," according to market analyst Josh Schimmer. Schimmer further added that there currently is, "widespread use of the product products with minimal standardization, evidence for benefit and understanding of safety profile."

Testers and independent analysts also spoke at the hearing, where they expressed significant concern about the snake oil salesman approach which many companies were taking when it comes to sales related to the product. In one instance, a company was advertising a bottle of "300 mg oil," but when tested, the bottle contained a mere 22 mg of the product - or, in at least one case, ZERO mg. The lack of regulations means that there is no verification of ingredients, no safety guidelines, and no way of independently evaluating the claims made by manufacturers and sellers of the product. This presents a slew of safety and economic risks to all parties involved, and opens up a variety of businesses up and down the sales chain to potential legal liability.

The hearing also took the time to review currently available research about the the product. On one hand, it noted that information currently available from groups like the World Health Organization have found the product to be safe. The same report noted that the product has a "good safety profile," but stated that further research is needed in order to verify claims about pain relief and anxiety reduction. This lack of information, however, has done nothing to slow the major growth of sales of the product.

In total, the hearing demonstrated that most businesses are looking for regulatory stability, while most scientists are searching for additional information to make better and more informed decisions about the product.

It's also worth noting that, in the aftermath of the FDA hearing, the stock market did not look kindly on many companies which are involved in marijuana sales, with almost all falling in its aftermath.

The federal government has been adjusting to this new legal reality. For example, the United States Department of Agriculture has said that states should not attempt to stop the transportation of hemp within their boundaries, as the 2018 Farm Bill ensured that hemp is no longer considered a controlled substance. The USDA has also said that it will issue its own regulations for the production of hemp by the Fall of 2020. Additional policy change has come from the Transportation Security Administration (TSA), which has said that transporting legally produced and source hemp on airplanes is legal.

Ongoing Legislative Efforts

While the product is now legal at the federal level, there remains a great deal of confusion over legal questions at in the various states. For example, many states (mostly those who have yet to legalize medical or recreational marijuana) have yet to update their own laws and regulations regarding the product. The story of Amy Wazwaz of Texas, as illuminated by the New York Times, perfectly captures this conflict. Wazwaz was operating a tobacco story in North Texas, and the store sold a variety of product-infused oils, creams and treats. Police, however, raided Wazwaz's store, seizing her merchandise.

The confusion has spread to interstate commerce, which is regulated differently than commerce which only occurs within a state's boundaries. There have been numerous reports of truck drivers being arrested for transporting legally sourced product, like in Idaho and in Ohio. In 2019, a woman was vacationing at Disney World with her grandchildren when she was arrested for possessing legal product; she has since sued.

It has become clear that there is a desperate need to end the confusing laws and regulations which deal with the product. Additional regulatory guidance from the United States Department of Transportation, as well as the DEA, FDA and USDA will unquestionably help alleviate the confusion.

Many states are also taking an active interest in this area. For example, the State of Louisiana is currently considering regulations on Hemp and the product. Specifically, the bill would allow the state of Louisiana to regulate hemp agriculture, including testing to ensure that the product grown would have less then .3% THC. It would also ban the use of hemp for individual use under the guise of ensuring that nothing was grown that could then be used as marijuana. Other states, like Georgia, are allowing for the growth of hemp, but have yet to update their product-related regulations, resulting in continued arrests.

The confusion has been noted by national news publications. In late May 2019, a politico article noted that there was a patchwork of state responses — ranging from broadly permissive to raids on retailers and seizures of trailers loaded with lucrative leaf. Politico published an article in which it noted the wide range of state responses to product-related legislation, noting that the legalization and lack of federal legislation have, "created a patchwork of state responses — ranging from broadly permissive to raids on retailers and seizures of trailers loaded with lucrative leaf."

There's no question about it: States are moving in opposite directions on this issue. That, in turn, is causing massive confusion among consumers, businesses and owners of related product lines.

Next steps from the FDA

The FDA, per a tweet from it's Deputy Director, has pledged to unveil a regulatory scheme for the product, "as quickly as possible without risking public health." It is now in the process of soliciting public feedback from individuals who are interested in regulation on "cannabis or cannabis-derived compounds."

The confusion at the state and local level is unquestionably putting additional pressure on the FDA to act. The FDA has said that it would like to have draft regulations of the product available by the end of the year, and told Congress the same thing in the aftermath of the 2018 Farm Bill's passage. That would put draft regulations available in December 2019.

Whatever happens, it needs to happen soon. The market for this product is currently estimated to be at $1.5 billion - but grow to as high as $22 billion in the next three years. However, this growth can only happen with a stable, sensible regulatory scheme which balances the need for a fast moving market against appropriate consumer and business protections.