Hemp CBD Across State Lines: Pennsylvania

The Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (CSA) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (USDA) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (Hemp CBD). Today we turn to Pennsylvania.

The Pennsylvania Department of Agriculture (PDA) regulates hemp cultivation in Pennsylvania. PDA has an industrial hemp program that requires participants to submit applications and obtain permits to cultivate hemp in the state. There are fairly robust requirements to get a permit unlike in some other states: owners must undergo federal background checks and submit detailed information about their business in order to get permitted. PDA also imposes detailed reporting requirements and requires that cultivators follow strict guidelines when growing hemp.

Notably, Pennsylvania’s hemp production plan was approved by the USDA but has not yet taken effect. When it does take effect, it will impose much more robust rules on hemp cultivators, and will also require processors to obtain licenses. Expect big changes in the future.

When it comes to Hemp CBD products, PDA generally follows the FDA’s position when it comes to Hemp CBD products, and does not allow Hemp CBD to be added to foods. PDA also states, for what it’s worth, that products and product labels must comply with any applicable law, including FDA laws. While PDA has not directly addressed most other Hemp CBD products (such as cosmetics), we can assume that the agency would follow in the FDA’s footsteps given its incorporation of FDA policy relative to foods. Therefore, sellers of products that contain Hemp CBD that do not make medical claims and are not on the FDA’s target list for any other reason might be safer in Pennsylvania.

For additional updates on changes to Pennsylvania hemp laws and Hemp CBD laws, please stay tuned to the Canna Law Blog.  For previous coverage in this series, check out the links below:

Sephora Paves the Way in Regulating CBD Cosmetics

While the U.S. Food and Drug Administration (“FDA”) continues to drag its feet in forging a clear path for the sale and marketing of hemp-derived cannabidiol (“Hemp CBD”) products, foreign agencies and industry players are leading the way by adopting their own sets of regulations.

Last week, giant beauty retailer Sephora announced it was now enforcing standards specifically tailored for all Hemp CBD products found on its shelves to ensure these products meet the company’s high-quality standards.

To comply with these CBD standards, all Hemp CBD products sold at Sephora must:

  1. Exclusively contain full-spectrum or broad-spectrum Hemp CBD extracts, no isolate.
  2. Be derived from hemp grown in the U.S.
  3. Be accompanied by a certificate of analysis that could be made available for customers upon request.
  4. Be tested three times for quality and purity, including CBD concentration levels as well as microbial and chemical contaminants.
  5. Comply with the “Clean At Sephora” standards imposed on all products carried by the company, which ban the use of over 50 ingredients, including sulfates, parabens, phthalates, mineral oils and other potential toxins.

As the first national retailer to adopt CBD guidelines, Sephora is raising the need to assist consumers in navigating this complex regulatory landscape.

Hemp CBD topicals represent a significant percentage of the booming CBD market. According to an August 2019 report released by Grand View Research, Inc., the global CBD skincare market is expected to reach $1.7 billion by 2025, with North America leading the way. Yet, back in 2017, 60% of online CBD products reviewed in a study published in the Journal of American Medical Association, were found to be mislabeled. Mislabeled often meant false potency claims, with 26% of these products containing lower concentrations of CBD than listed on their labels.

Add to that the issue of adulteration and the sad reality that many CBD topicals–and CBD products, generally –contain dangerous substances. The issues are obviously hugely problematic and stress the need for standards like those adopted by Sephora to protect consumers from public health crises.

We applaud Sephora for leading the way in regulating the industry and hope that the company’s initiative will further pressure the FDA to fulfill its responsibility to ensure the safety of our nation’s cosmetics (among other things) by adopting its own regulations for the sale and marketing of these products.

We’ll continue to update you on any other regulatory development via this blog.

As China’s Hemp Industry Suffers, U.S. Hemp Growers Prepare to Pounce

The U.S. hemp market continues to heat up for a variety of reasons, mainly because the general populace is finally starting to understand the difference between cannabis as marijuana and cannabis as hemp (and the benefits of CBD and other cannabinoids derived from cannabis). In this post I’ll discuss why China’s pain can be U.S. hemp producers’ gain.

Basic principles of economics dictate that in the U.S. hemp market where demand stays constant (or increases) and supply decreases due to something like a coronavirus in China, the price of that good increases (sometimes substantially), enriching existing suppliers and drawing more suppliers into the market.

And it is also true that where there is available supply (U.S.) with the same or better good that can make up for the decreased market supply without substantially increasing the cost of that good, those suppliers will fill the void, equalizing supply and demand. China’s export-led hemp industry, with its normally outsized international presence, is no exception.

U.S. hemp producers happen to be 7,000 miles closer to the U.S. market than Chinese hemp producers. And do not forget that China’s hemp industry is only now starting to diversify from its industrial hemp products into consumer hemp products, so many U.S. hemp producers and extractors are ahead of their Chinese competitors.

Virtually all of China’s industries have been hit hard by the effects of the novel coronavirus (COVID-19). China is still basically on lockdown due to COVID-19, which means that most businesses are hobbling at best as they try to comply with government directives to get workers back to the factories and get production back up to capacity, with all of the attendant problems you can imagine in trying to do so under a nationwide epidemic.

But Chinese farms keep producing hemp, which will lead to a glut of raw and finished products in certain industries. These products require an export market; China has no significant domestic market to absorb its hemp production. This export bottleneck is less of an issue in one of China’s hemp centers in northeast Heilongjiang Province, where the average temperature in winter hovers barely above 0 degrees. But it certainly matters in China’s other hemp center of southwest Yunnan Province where its average temperature in winter is comfortably above freezing and has multiple growing seasons.

I recently read a good article in Hemp Industry Daily that said U.S.-based hemp growers will not be the only ones to benefit from China’s current virus-related meltdown and trade friction. It said, “this newest issue underscores the vulnerabilities in the global marketplace that vape and other cannabis and hemp companies rely on for products ranging from LED lighting to packaging supplies.”

Two of my co-authors, Adams Lee and Griffen Thorne, provided insight on that topic almost a year ago (see here). So opportunities also abound for cannabis-related companies to renegotiate contracts with Chinese suppliers, many of whom have already started reneging on current contracts as they point to force majeure clauses in their contracts.

And as I mentioned in a prior blog post, U.S.-based hemp companies need all of the good news they can get as they try to compete with China, but it will probably not come from the Phase One trade deal:

When the trade agreement was made public, some honed in on the appearance of hemp in the trade agreement, the relatively recently de-scheduled industrial crop in the U.S., thanks to the 2018 Farm Bill (Agricultural Improvement Act of 2018). One prominent marijuana publication published an article the day after the trade agreement was made public, on January 16, claiming that, “China Must Import More Hemp From U.S. Under New Trade Deal.” That is an overly generous interpretation of the trade agreement. . . The short gloss is that China may buy more hemp from the U.S. under the new trade deal, but China is definitely not obligated to buy more (or any) U.S. hemp as a result of the trade deal.

As one economics professor described to me recently, “The phase one trade deal is basically dead.” That reality, coupled with the current COVID-19 pain, means that China will be offline for some time to come, and that means U.S. hemp producers prepared for export markets will find less competition in the international marketplace.

If you are interested in keeping up with China-focused legal developments, check us out on our multiple award-winning China Law Blog.

Hemp CBD Across State Lines: Oregon

The Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (CSA) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (USDA) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (Hemp CBD). Today we turn to Oregon.

Oregon was one of the first states to allow the production of industrial hemp following the enactment of the 2014 Farm Bill. Pursuant to Chapter 571 of the Oregon Revised Statutes, the Oregon Department of Agriculture (“ODA”) oversees the cultivation and processing of industrial hemp, Hemp CBD products, and commodities. Any grower or processors (known as “handlers” in the state) must secure a license from the ODA and comply with comprehensive reporting, recordkeeping and total THC testing requirements.

Oregon is also one of the states that have interpreted the 2014 Farm Bill to allow for the commercial sale of industrial hemp and Hemp CBD products, including products intended for human consumption. “Consumption” means “to ingest, inhale, topically apply to the skin or hair.” This means that Oregon permits the sale and marketing of Hemp CBD foods, non-alcoholic beverages, dietary supplements, cosmetics and smokables so long as they contain no more than 0.3% total THC and are free of certain chemicals.

Another unique aspect of Oregon hemp law is that it provides an opportunity for ODA-licensed growers and handlers to sell and transfer their products to the state’s marijuana recreational market so long as they satisfy certain licensing, testing, labeling and recordkeeping requirements.

Although the hemp rules only regulate the production and sale of hemp and Hemp CBD products within the state, ODA-licensed growers and handlers are free to sell or transfer these products outside of the state so long as they contain no more than 0.3% total THC. Under Oregon law, the exportation (and importation) of hemp and Hemp CBD products containing more than 0.3% total THC is strictly prohibited. This means that out-of-state growers, processors, manufactures and distributors wishing to sell their Hemp CBD products in Oregon must also ensure compliance with Oregon’s total THC testing standards before their product cross state lines. Violating this law is a Class C felony.

When it comes to transportation, the ODA rules mandate that any industrial hemp or industrial hemp seeds transported within the state be accompanied by a copy of the hemp registration and a copy of the pre-harvest test results that corresponds to the harvest lot in transit.

Earlier this year, the ODA submitted a plan to the U.S. Department of Agriculture to oversee the production of hemp under the 2018 Farm Bill. However, the Oregon agency ultimately decided to continue operating its hemp program under the 2014 Farm Bill. Therefore, the requirements currently imposed on hemp stakeholders will remain in place until October 30, 2020.

Currently, the Oregon legislature is technically still in session: we previewed Senate Bill 1561 and the other hemp-related draft bills here. Unfortunately, the session is now hanging by a thread due to a controversial walk out, and there is a chance we don’t see a state hemp plan for commercial production and sale, a state hemp commission, or any of the other hemp-related proposals that seemed to have real legs before the session.

For more updates on Oregon’s Hemp CBD laws, stay tuned to the Canna Law Blog. And for previous coverage in this series, check out the links below:

BREAKING NEWS: FDA and USDA Start Making Sense on Hemp CBD

According to Hemp Industry Daily reporter Laura Drotleff, it an eventful week for hemp regulation at the National Association of State Department of Agriculture (NASDA) meeting in Arlington, Virginia. Drotleff reported on two major developments at NADSA. These developments came from the Food and Drug Administration (FDA) and the US Department of Agriculture (USDA), respectively, which are the primary regulators of hemp and its derivative products. Both are analyzed below.

FDA Changing Its Tune on Hemp CBD?

FDA Commissioner Stephen Hahn, M.D., said that the agency is working towards regulating hemp-derived CBD (Hemp CBD) products and admitted that the agency’s approach to Hemp CBD is not sustainable:

We’re not going to be able to say you can’t use these products. It’s a fools errand to even approach that[.] We have to be open to the fact that there might be some value to these products and certainly Americans think that’s the case. But we want to get them information to make the right decisions.

Finally! The FDA is finally taking a rational approach to Hemp CBD. This is a major departure from the FDA’s recent messaging on Hemp CBD and it’s coming from the head of the agency.

It was only three months ago, on November 25, 2019, that the FDA sent out a whopping 15 warning letters to companies selling CBD and issued a consumer update stating that CBD was dangerous and could harm people before they even knew the harm occurred. Now, Dr. Hahn is admitting that the agency sees value in Hemp CBD and wants to make sure that consumers get enough information to make the right decision. Good! That’s what the FDA should be doing instead of constantly repeating that most Hemp CBD products are unlawful.

Now I know what you’re thinking: Aren’t you getting a little over-enthusiastic about a single statement on Hemp CBD? It’s not as if the law has changed or the FDA’s actually issued any regulations on Hemp CBD. Plus, hasn’t the FDA made positive statements on Hemp CBD before?

Yes, it’s true that Dr. Hahn has not established a regulatory framework for Hemp CBD with his statements, or convinced Congress to alter the Food, Drug and Cosmetic Act (FDCA) to accommodate Hemp CBD. It’s also true that before leaving his post, former FDA Commissioner Scott Gottleib, M.D., testified to Congress that “[w]e believe [CBD] does have therapeutic value and has been demonstrated[.]” That being said, there is reason to be excited the statements made in Arlington because of who said it and who heard it.

Let’s start with Dr. Hahn. The FDA’s issue with Hemp CBD stems from the FDCA’s “Drug Exclusion Rule” which, simply put, means that an article that has been approved or investigated as a drug cannot be a dietary supplement or be added to food unless the article was marketed as a supplement or food before it was investigated. CBD has been approved as an article in the drug Epidiolex and the FDA does not believe that CBD was marketed as a food or supplement prior to that investigation. But, the FDCA grants the FDA Commissioner can override the Drug Exclusion Rule by issuing “a regulation, after notice and comment, finding that the article would be lawful under [the FDCA].”  As head of the FDA, Dr. Hahn has the ability to regulate Hemp CBD so his statements are important.

Now, let’s talk about the audience which was made up of representatives from state departments of agriculture across the country. We’ve been doing a series on how states treat Hemp CBD and if you’ve been following it you know that states have been struggling to regulate Hemp CBD in light of the FDA’s position. Some states have regulated Hemp CBD despite the FDA’s slow movement, others are locked into the FDA’s policy, banning Hemp CBD in foods and dietary supplements. Many are somewhere in between, trying to figure out how the FDA will act. A positive statement like this from Dr. Hahn, made directly to the NASDA is likely to have ripple effects on enforcement policies across the state. This doesn’t mean that everything will change overnight, but I think it does portend a change in Hemp CBD policy across the US.

USDA Ditches DEA Registration

Drotleff also covered a very promising statement from USDA Undersecretary Greg Ibach, who told the NASDA that the USDA has reached an agreement with the Drug Enforcement Agency (DEA) to remove the requirement that only DEA-registered labs test hemp for THC. The DEA wrinkle was not part of the 2018 Farm Bill but was included in the USDA’s interim hemp rules issued in October.

The DEA registration was widely opposed by the agriculture community. Requiring DEA registration on all labs testing hemp creates a huge potential for a bottleneck as all hemp must be tested 15 days before harvest and there are less than 50 DEA-registered labs that could even undertake these tests. Many state departments of agriculture saw this as such a burden that they decided not to even submit a hemp cultivation plan to the USDA, electing to run out the clock with the 2014 Farm Bill, which expires October 31, 2020, rather than operate under the USDA’s interim rules and 2018 Farm Bill. The DEA Registration was a big part of this.

There are still challenges in THC testing, including the need to test for Total THC (delta-9 THC and THCA), which has caused some cultivars of hemp that would have been legal under the 2014 Farm Bill to fail under the 2018 Farm Bill). Still, this is a step in the right direction and quite promising, considering that the USDA will again accept public comments after the 2020 season.

Conclusion

The USDA and FDA are the two federal agencies directing the domestic hemp market. This process is far from over, but the NASDA meeting indicates that policy is moving in the right direction. If nothing else, these agencies are cognizant of how their decisions are perceived by the public and by state regulators. If you’re interested in hemp and Hemp CBD, stay focused on the FDA and USDA and make sure to participate in the public discourse.

Hemp CBD Across Europe: The United Kingdom

The enactment of the 2018 Farm Bill and the legalization of hemp and hemp derivatives, including cannabidiol (“CBD”), has led to a massive CBD craze in the United States. The highly coveted cannabinoid is infused with everything: bath bombs, dog treats and even workout clothes (yes, workout clothes!). According to a recent study by Cowen, the sales of these products are expected to reach $16 billion by 2025.

Thanks to globalization, this sudden boom is not contained within the U.S. borders. Europe has also experienced a huge uptick in the sales of these products, which are expected to reach nearly $1.7 billion by 2023.

In light of this global expansion and the desire of many of our clients to export their hemp and hemp-derived CBD (“Hemp CBD”) products to Europe, we are presenting a mini-series that briefly analyses how certain European countries treat hemp and the sale and marketing of hemp-derived CBD. We begin by analyzing the laws of the United Kingdom (“UK”).

Hemp

Because industrial hemp falls under the definition of genus Cannabis, UK law treats it as a controlled drug in Class B of The Misuse of Drugs Act 1971 (“MDA”) and Schedule 1 of The Misuse of Drugs Regulations 2001 (“Regulations”). Under these Regulations, a license must be issued in order to lawfully cultivate the crop.

As a former European Union member, the UK limits the lawful cultivation of hemp strains to those found in the European Commission’s catalogue, all of which produce no more than 0.2% THC. Generally, UK law also requires that hemp from “third countries”’ be imported under a license.

Although hemp cultivation is lawful, UK farmers are prohibited from processing hemp flowers and leaves, where the highest CBD content can be found. Consequently, the processing of hemp into CBD oil is not permissible, forcing the country to heavily rely on the importation of CBD to sustain the market. In addition, the sale of CBD flowers and buds is strictly prohibited in the country even if the THC concentration is below 0.2% and from EU-approved origin.

Hemp CBD Products

In the UK, Hemp CBD products may be commercially sold so long as they:

  1. contain no more than 1 mg (0.01%) of THC and/or of any other controlled cannabinoid, such as THC-V; and
  2. make no health claims about their therapeutic values.

Other requirements may apply based on the category of products at issue.

Hemp CBD Foods

As we recently discussed, the Food Standard Agency (“FSA”), the agency responsible for protecting public health in relation to food in the UK, recently cleared a path for the sale of Hemp CBD food. Specifically, the FSA is giving the CBD industry until March 31, 2021 to submit valid novel food authorization applications to ensure these products meet specific safety standards. Following the March 31, 2021 deadline, only products for which a valid application has been submitted will be allowed to remain on the market. Therefore, for now, the sale of CBD-infused foods is lawful in the UK so long as these products are:

  1. Properly labeled, including free of health claims;
  2. Safe to consume; and
  3. Only contain low/negligible amounts of THC or other controlled substances (i.e., no more than 1 mg).

Hemp CBD Cosmetics

There are no regulations that pertain to the sale and marketing of Hemp CBD cosmetics in the UK. However, even following its exit from the EU, the country strictly regulates the sale of all cosmetics pursuant to the EU Cosmetics Regulation. For more information on these regulations, you can visit the Cosmetic, Toiletry and Perfumery Association (“CTPA“), the trade group that aims to regulate the cosmetic industry and educates consumers about the safety of these products.

Hemp CBD Vape Products

Similarly to US regulations, vape products may be subject to regulation by various governmental agencies depending on their purpose, how they are being used, and whether they contain nicotine and/or tobacco. As of now, no agency has issued Hemp CBD regulations for the sale and marketing of vaping products. All we know, thanks to the Medicines and Healthcare products Regulatory Agency (“MHRA”), is that Hemp CBD vaping products are “less tightly regulated” and that these products should not contain any health claims.

Hemp CBD Pet Foods and Products

Hemp CBD Pet food and pet products are treated as veterinary medicines and thus would require a license before they can be lawfully sold in the UK. There are currently no Hemp CBD products licensed for veterinary use, which means the sale and marketing of these products is unregulated at best, and unlawfully at worse.

So, unlike in the US, the sale and marketing of Hemp CBD foods is the safest category of products a CBD company may sell right now given the fairly clear regulations implemented by the FSA – assuming their products meet all requirements imposed on these products, including no more than 1 mg THC per product.

Hemp CBD Across State Lines: Oklahoma

The Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (CSA) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (USDA) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (Hemp CBD). Today we turn to Oklahoma.

In April 2018, shortly before the passage of the 2018 Farm Bill, Oklahoma enacted the Oklahoma Agricultural Industrial Hemp Pilot Program (OAIHPP). The Oklahoma Department of Agriculture, Food, and Forestry  (ODAFF) passed temporary rules in May of 2018.

At the time that the OAIHPP was established, the 2014 Farm Bill governed hemp and Oklahoma’s program reflects that. According to ODAFF’s website, “a farmer wishing to grow industrial hemp must establish a relationship with a University or college that belongs to the Oklahoma State System of Higher Education and has a plant science curriculum. Once the farmer has a relationship with a University or College they can apply to the Department to receive a license for each cultivation site.”

In April 2019, Oklahoma passed Senate Bill 868, which directs ODAFF, in consultation with the Governor and Attorney General to submit a hemp cultivation plan to the USDA to bring the state’s hemp program in compliance with the 2018 Farm Bill.  According to the USDA website, Oklahoma is currently drafting a hemp cultivation plan.

When it comes to Hemp CBD there is yet another piece of recent legislation in the mix:  Senate Bill 238 which passed in May 2019.  Products containing Hemp CBD, other than pharmaceuticals approved by the FDA (i.e., Epidiolex), must include the following on the label:

  1. The country of origin of the cannabidiol; and
  2. Whether the cannabidiol is synthetic or natural.

SB 238 also states that, “retail sales of industrial hemp and hemp products may be conducted without a license so long as the products and the hemp used in the products were grown and cultivated legally in this state or another state or jurisdiction and meet the same or substantially the same requirements for processing hemp products or growing hemp.” This appears to indicate that Hemp CBD sales in Oklahoma are OK (apologies, I had to have at least one shameless pun).

SB 238 also states that the addition of hemp derivatives, including Hemp CBD, does not make “cosmetics, personal care products, and products intended for human or animal consumption” adulterated. A license is not required to manufacture Hemp CBD products. However, SB 538 does not “exempt any individual or entity from compliance with food safety and licensure laws, rules and regulations as set forth under the Oklahoma Public Health Code.” That clarification does not explicitly mention the Food, Drug and Cosmetic Act or FDA regulation meaning that Oklahoma has left the door open to Hemp CBD products that the FDA opposes, such as foods and dietary supplements.

Oklahoma is still working on its hemp cultivation plan. It may not have the most robust Hemp CBD regulations but SB 238 at least addresses Hemp CBD, which is more than many other states can say.

For previous coverage in this series, check out the links below:

The Sale of CBD Foods Is Legal in the UK (For Now)

Last week, the Food Standard Agency (“FSA”), the agency responsible for protecting public health in relation to food in England, Wales and Northern Ireland (collectively, the “UK”), cleared a path for the sale of CBD-infused food for the next 12 months.

Specifically, the FSA is giving the CBD industry until March 31, 2021 to submit valid novel food authorization applications to ensure these products meet specific safety standards. Following the March 31, 2021 deadline, only products for which a valid application has been submitted will be allowed to remain on the market.

Although the UK recently severed its ties with the European Union, the FSA has opted to align its policy with that of the European Food Safety Authority (“EFSA”). The EFSA guidance on cannabinoids strongly echoes the U.S. Food and Drug Administration (“FDA”)’s in that it mandates that all food products infused with hemp or its derivatives should receive a pre-market approval under the European Union “novel food” regulation because these products were not significantly used as a food or food ingredient before May 15, 1997.

According to the reporting of Hemp Industry Daily, CBD companies wishing to sell into the UK market will send approval plans to the EFSA through the end of 2020, at which point all applications will be transferred to the FSA.

So for now, the sale of CBD-infused foods is lawful in the UK so long as these products are:

  1. Properly labeled, including free of health claims;
  2. Safe to consume; and
  3. Do not contain THC or other controlled substances.

Despite the fact that the FSA gave the green light on the sale of CBD-infused foods, the agency also warned consumers about its potential side effects.

Based on a scientific report issued by the country’s Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment (“COT”), the FSA guidelines warn pregnant and nursing women “not to consume CBD products” and recommends that healthy adults limit their daily dosage to no more than 70 milligrams, which is the equivalent of 28 drops of 5% CBD oil.

After reviewed scientific data of Epidiolex previously used by European and foreign health authorities, including the FDA, for the approval of the drug, the COT concluded that because the data was intended for pharmaceutical and not over-the-counter use, the “trade-off between risks and benefits that does not apply to food.”

Therefore, in drafting this new policy, the FSA opted for a pragmatic approach that balances the consumer demand for CBD-infused food products with the protection of public health and provides much needed clarification about the legality of selling and marketing CBD-infused foods. Nevertheless, the guidelines also create some serious challenges for the industry. Indeed, the novel food application process is a demanding and onerous process. Unless a blanket authorization will cover each end-form of CBD (this issue has yet to be clarified by the FSA), this would mean that only a handful of CBD companies could afford applying. This, in turn, would consolidate these products and offer a monopoly to the companies that manage to secure an approval.

Nevertheless, the FSA guidelines are a step in the right direction, as they  encourage the Hemp-CBD industry to work together, educate and advise, which, hopefully, will inspire the FDA in forging a clear path for the sale and marketing of these products within U.S. borders, too.

Hemp CBD Across State Lines: Ohio

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Today we turn to Ohio.

Hemp cultivation in Ohio is regulated by the Ohio Department of Agriculture (“ODA”). Notably, Ohio was among the first states that got a 2018 Farm Bill hemp production plan approved by the USDA. Way to go, Buckeyes! People who want to grow hemp in Ohio will need to obtain licenses from the ODA and hemp cultivated there is subject to testing requirements established by the USDA’s interim hemp rules.

When it comes to Hemp-CBD, the state has not dialed in its regulatory regime. The ODA is in the process of reviewing public testimony before adopting rules affecting the processing of Hemp CBD products. In late 2019, there was a public hearing concerning proposed processing rules that would govern many different types of Hemp-CBD products (as of today, those regulations haven’t been officially adopted). It’s important to note that these rules would not let anyone go and start processing. Instead, licenses would be required and it looks like the state’s requirements will be pretty comprehensive.

The products that the rules would govern include “hemp buds, flowers, cigarettes, cigars, shredded hemp, cosmetics, personal care products, dietary supplements or food intended for animal or human consumption, cloth, cordage, fiber, fuel, paint, paper, particleboard, and any other product.” So basically, anything under the sun. Notably, the rules anticipate the production of Hemp-CBD products (e.g., cosmetics and food) but also anticipate the use of hemp in all kinds of other products that will not be marketed for Hemp-CBD content (e.g., paint and fuel). These rules are therefore extremely comprehensive.

These rules would also impose some strict requirements on manufacture, including pretty standard things that our hemp attorneys see in other states. This includes testing and labeling, to start.

In sum, while Ohio probably isn’t anywhere near the top of the list when people think about states that allow hemp, it’s actually more friendly than a lot of other large states (looking at you California). While states like California are still in prohibitionist mode for all kinds of Hemp-CBD products, states like Ohio are taking the wheel. For more updates on Ohio’s Hemp-CBD laws, stay tuned to the Canna Law Blog.

For previous coverage in this series, check out the links below:

The Four Basic Labeling Requirements for CBD Products

Last week, I attended Portland’s Hemp CBD Connex, an annual event that highlights the vast potential of hemp and CBD.

Of interest to me–because my practice focuses on the regulatory framework of CBD products–was a panel entitled “Weeding Through the CBD Jungle: How to Grow, Run and Be Successful.” This panel was led by two experienced industry leaders: Stuart Bennett, VP of Contract Manufacturing for Canopy Growth, and Alex Rullo, Executive VP of Strength of Hope. Both panelists discussed the dos and don’ts of selling and distributing CBD products in interstate commerce and stressed the importance of complying with the CBD laws of each state in which a product is sold. This was music to my ears!

As you already know if you follow our blog, the Food and Drug Administration (“FDA”) has taken the position that CBD-infused foods and dietary supplements cannot be lawfully sold or marketed in the United States. Yet, states have adopted their own approaches to regulating CBD products that are not necessarily consistent with the FDA’s current position.

Some states, including Colorado and Oregon, allow the manufacture and sale of all CBD products, including food, dietary supplements, smokable products, and cosmetic products. Other states, like Idaho, strictly prohibit the production and/or sale of any such products. A handful of other states, including California, have banned certain categories of CBD products (usually food and dietary supplements) but seem to take no issue with the sale of other products, such as CBD cosmetics.

In addition, some states that have legalized the sale of Hemp CBD products impose their own regulations, including but not limited to labeling and testing requirements.

As we previously discussed, CBD manufacturers and distributors selling their products in interstate commerce should familiarize themselves with labeling and marketing laws in each state where they plan on placing their products. As a rule of thumb, companies should adopt the most stringent rules, such as those imposed by Indiana, Texas and Utah, to ensure compliance across state lines.

While it’s impossible to cover all state labeling and marketing laws in one blog post, I thought I would provide a brief overview of the label components that have become standard in the industry:

The FDA’s General Labeling Requirements

Every state that authorizes the sale of CBD products also mandates, in one way or another, that the labels of CBD products sold within their borders be labeled in accordance with the Food, Drug and Cosmetic Act (“FDCA”). Under the FDCA, the labels of any product sold in the United States must contain four basic elements:

(1) An identity statement, which indicates what the product is;
(2) A net weight statement;
(3) A list of all ingredients, which in states like New Mexico and Colorado, must clearly identify hemp and CBD. This requirement makes it difficult for companies that are steering clear from using the term “CBD” in an attempt to mitigate the risk of enforcement action. For more information on this issue, please read here; and
(4) The name and address of the manufacturer, packer or distributor along with their street address.

Scannable Bar Code or QR Code

A growing number of states are mandating the use or a scannable bar code, QR code link or web address linked to a document containing information, pertaining to:

  • the batch identification number;
  • the product name;
  • the batch date;
  • the expiration date, which in some states like Indiana, must be not more than two (2) years from the date of manufacture;
  • the batch size;
  • the total quantity produced;
  • the ingredients used; and
  •  certificate of analysis.
FDA Warning Statement

States like Colorado require that the following statement appear on CBD product labels: “FDA has not evaluated this product for safety or efficacy.”

No Medical or Health Claims

As we have discussed at length, the FDA has limited its enforcement actions against CBD companies that make outrageous and unfounded health claims about the therapeutic values of their products. Nevertheless, many states demand that the labels of CBD products sold within their borders be free of any health claims. It’s important to understand that drug claims don’t need to be explicit. If a company implies that its product can be used to treat a disease, the FDA and local authorities may conclude that the product is a drug.  Consequently, if a CBD company makes any medical, disease, or bodily structure or functional claims or implications about its products, the FDA will likely conclude that the company is marketing unapproved drugs in violation of the FDCA.

Ensuring compliance with the labeling and marketing laws (and policies) of each state in which a CBD product is sold can be challenging, yet it is a crucial step in mitigating the risks of enforcement action by federal and state agencies.