Cannabis Regulation Commission Wants Crackdown on Illegal L.A. Pot Shops

When the U.S. Congress passed the 2018 Farm Bill in December, legalizing domestic hemp production and sales, the Food and Drug Administration abruptly interjected to say that hemp-derived CBD would not be permitted as an ingredient in food or beverages—the very thing that many companies and consumers had been celebrating as Congress cast its votes on the bill. CBD, according to FDA Commissioner Scott Gottlieb, must be treated as any other pharmaceutical compound.

The administration took a hardline stance, but signs are pointing toward a softening approach to setting new CBD policy in the future.

“It’s unlawful under the [Federal Food, Drug, and Cosmetic 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,” Gottlieb wrote in December. “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.” CBD is an active ingredient in the FDA-approved Epidiolex. As such, a precedent had been set on this chemical constituent of cannabis; any products containing CBD would need to work through a “pathway” to FDA approval, which includes clinical trials.

Now, in testimony presented before the House Appropriations Committee on Feb. 27, Gottlieb said that his administration will revisit the CBD question. He said that plans are in the works for a public meeting in April to develop a set of rules for CBD regulation. “I’ll say at the outset that we heard Congress loud and clear with respect to [the Farm Bill]. … We believe it does have therapeutic value and has been demonstrated,” he said. “But I will tell you this is not a straightforward process. There’s not a good proxy for us doing this through regulation.”

Jonathan Havens, partner at Saul Ewing Arnstein and Lehr, told Cannabis Business Times that the rulemaking process at the FDA is complex, and, ultimately, may demand legislative intervention from Congress. The hearing in April will suss out the protocol here.

What’s happening in the immediate sense is that hemp-derived CBD (cannabidiol extracted from a cannabis plant containing less than 0.3-percent THC) is set on a distinct regulatory track from state-licensed cannabis businesses. CBD that’s been tested and is being sold as a concentrate in a licensed dispensary in, say, California, is going to be treated much differently than mysteriously-sourced CBD pens that show up at your local gas station. Even CBD concentrates extracted from legal hemp plants grown on a licensed farm in North Carolina: Because that chemical constituent is under the province of FDA oversight (because of the Epidiolex clinical trials), they can’t be openly sold in the consumer goods marketplace.

“If something is studied in a substantial clinical trial, and/or if it’s the subject of an approved drug application, then it’s not a permissible dietary ingredient,” Havens said. “The FDA’s position has nothing to do with the [former] federal illegality [of hemp], although I think they would probably tell you that you shouldn’t put a federally illegal substance into anything else—and then sell it to interstate commerce—because then you’ve got a problem on your hands.”

The FDA has issued stern warnings on this subject, including Gottlieb’s December letter. State and local authorities in some jurisdictions, including Ohio, have preemptively begun confiscating CBD products in stores (not licensed dispensaries).

Despite those warnings from the federal administration, uncertainty is a driving force in how CBD policy is enacted.

“I will tell you that we’re deeply focused on this. We have taken on other hard challenges before,” Gottlieb told the House Appropriations Committee this week. “I think we have a good track record of trying to come to resolution on other challenges. You have my commitment that I’m focused on this one.”