By Jason P. Tortorici and Joseph P. Schilleci, Jr.

Have you heard this story – my 85 year old grandmother has had back problems and terrible arthritis for years.  She tried CBD (cannabidiol – the therapeutic, non-psychoactive compound found in hemp and marijuana) and has no pain at all!  CBD is the latest and greatest nutraceutical and food additive.   It is everywhere.  Drive down to the Gulf Coast and you will pass a cornucopia of corner stores and markets selling gummies, tinctures and other consumables all containing this wonderous compound derived from the cannabis plant is touted to cure and treat everything from anxiety to Covid-19.  So when did this become legal?  Well, actually, it’s not. 

Legal status under the 2018 Farm Bill

The legal status of the cannabis plant effectively changed in 1937 with the passage of the Marihuana Tax Act.  When Congress passed the Controlled Substances Act in 1970, all cannabis, including industrial hemp, was formally banned in the United States.  However, in 2018, Congress enacted the Agriculture Improvement Act (the 2018 Farm Bill) which removed industrial hemp from the list of banned controlled substances.  Hemp is distinguished from Marijuana – which is still a banned schedule 1 controlled substance in the United States despite legalization in several states and territories – based on the volume of delta 9 tetrahydrocannabinol (THC), the psychoactive compound in marijuana that produces the “high.”  Cannabis plants which contain less than 0.3% THC are considered “hemp” by definition and no longer banned.  Hemp and its derivatives, including legally made products, may be moved through interstate commerce and shipped overseas without interference from the DEA. However, the 2018 Farm Bill explicitly reserved authority to the United States Food and Drug Administration (FDA) to regulate what products are permissible.  

So, has the FDA approved the cornucopia of CBD products? The short answer is, “no.” While the 2018 Farm Bill legalized industrial hemp and hemp derived products, it stopped short of declaring CBD and other cannabinoids permissible dietary supplements and food additives.  This authority was reserved to the FDA.   In December of 2018, following the passage of the Farm Bill, the FDA issued a publication entitled, “FDA Regulation of Dietary Supplement & Conventional Food Products Containing Cannabis and Cannabis-Derived Compounds,” which was intended to clarify its stance on supplements and food products containing CBD.  In response to the increasing number and popularity of such products, the FDA was compelled to clarify that although the 2018 Farm Bill legalized hemp and its derivatives, cannabinoid compounds such as CBD and THC could not be legally marketed as dietary supplements or as additives in conventional foods.

Dietary Supplements

The U.S. Food, Drug & Cosmetic Act (FDCA) defines a dietary supplement as meeting the following criteria:

(1)        be intended to supplement the diet that bears or contains one or more of the following dietary ingredients: (A) a vitamin; (B) a mineral; (C) an herb or other botanical; (D) an amino acid; (E) a dietary substance for use by man to supplement the diet by increasing the total dietary intake; or (F) a concentrate, metabolite, constituent, extract, or combination of the foregoing ingredients;

(2)        (A) intended for ingestion in tablet, capsule, powder, softgel, gelcap or liquid form; (B) not represented for use as a conventional food or as a sole item of a meal or the diet; and (C) labeled as a dietary supplement; and

(3)        if it includes articles approved as new drugs under 21 U.S.C. § 355, then prior to its approval, the product must have been marketed as a dietary supplement or food, unless a regulation has been issued, after notice and comment, that the article when used as a dietary supplement is unlawful under 21 U.S.C. § 342(f), but does not include articles approved as new drugs which prior to such approval were not marketed as dietary supplements unless a regulation has been issued, after notice and comment, finding the article is lawful under 21 U.S.C. § 342(f).

21 U.S.C. § 321(ff).

The FDA takes that position that CBD does not meet the definition of a dietary supplement because CBD is the active ingredient in an approved pharmaceutical drug, Epidiolex. Epidiolex is a purified form of cannabidiol prescribed for severe epilepsy and seizure disorder.  While there is an exception for any active compound in an approved drug which would allow the compound to be marketed as a dietary supplement if that compound was marketed as a supplement or food prior to approval or commencement of clinical trials related to the approved drug,  the FDA’s 2018 publication states that FDA is “not aware” of any  supplements or foods containing CBD that were marketed prior to the commencement of clinical research related to Epidiolex.  Thus, CBD cannot be a dietary supplement because it falls outside the statutory definition of a dietary supplement.

Foods

Likewise, CBD is not permissible as a food or food additive. Section 301(ll) of the FDCA prohibits introduction and marketing of foods that contain any compound that is an active ingredient in an approved drug.  As with dietary supplements, if the compound in question is shown to have been marketed in foods prior to drug approval or commencement of drug related clinical research, that compound may be marketed as a food or food additive.  With foods, however, there is an additional pathway where CBD might be permissible. 

Does CBD Meet GRAS Requirements

Hemp and its derivatives might overcome the foregoing restrictions by being GRAS certified.  The term “GRAS” is an acronym for the phrase “Generally Regarded as Safe.”  Pursuant to 21 U.S.C. §§ 321(s) and 348, any substance intentionally added to a food is a food additive, that is subject to premarket review and approval by FDA, unless the substance is GRAS under the conditions of its intended use.  A food additive may be determined GRAS through scientific procedures (21 CFR § 170.3(h) or for a substance used in food before 1958, through experience based on common use in food (21 CFR § 170.3(f). Presently, the FDA has reviewed and approved three hemp derivatives – hulled hemp seeds, hemp seed protein powder, and hemp seed oil under GRAS procedures. 

According to the FDA, the term “safe” means that with reasonable certainty in the minds of competent scientists the substance is not harmful under the conditions of its intended use.  21 CFR § 170.3(i); See also Frequently Asked Questions About GRAS for Substances Intended for Use in Human or Animal Food: Guidance for Industry, October 2016, at page 7.  In this regard, for a GRAS finding through the scientific procedures method, the data and information relied upon by the manufacturer for the safety of the use must be generally public available public information, as opposed to privately held data and information. Importantly, however, it must be recognized that it is the use of the substance, rather than the substance itself, that is eligible for classification as GRAS.  21 U.S.C. § 321(s); 81 Fed. Reg. 54960, 54963.

Currently, a manufacturer may undertake what is referred to as “self-affirmation” of GRAS status, or the manufacturer can voluntarily notify FDA of its conclusion that a compound such as CBD is GRAS under the conditions of its intended use.  See 21 CFR part 170, subpart E. Although the FDA recommends usage of the GRAS notification procedure, it is not required, and the final GRAS may be made independently of the manufacturer’s.  See Regulatory Framework for Substances Intended for Use in Human Food or Animal Food on the Basis of Generally Regarded as Safe (GRAS) Provision of the Federal Food, Drug and Cosmetic Act: Guidance for Industry, November 2017.  In this regard, oftentimes manufacturers will first seek the FDA listing so as to satisfy themselves that their self-assessment of the GRAS determination is correct.  The GRAS notification procedure requires the FDA to respond within 180 days with an option to extend another 90 days as needed.

If the manufacturer is correct in concluding that a substance is GRAS under the conditions of use, there is no requirement for the FDA to review and approve the substance as GRAS.  Likewise, there is no requirement that it be it listed as GRAS by the FDA before marketing such substance. As explained by the Agency, “when the data and information regarding the safety of the substance under the conditions of its intended use satisfy GRAS criteria, neither the law nor this rulemaking would prevent you from marketing a substance before submitting a GRAS notice or during our evaluation of that notice.”  See Response to comment 114, 81 Fed. Reg. 54960 at 55022. 

Presently, the FDA has denied GRAS findings as it relates to CBD as a food or dietary supplement.  As of 2018, FDA stated that it “is not aware of any basis to conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.”  Further, since 2018, there do not appear to have been any GRAS notices submitted to the FDA. 

Topicals, Cosmetics, and Smokable Products

Many CBD products on the market today are topical creams and balms intended to prevent or relieve pain in addition to a variety of smokable products such as vape pens and oils.  These products are also subject to FDA oversight.  The FDCA prohibits introduction of such products into interstate commerce if they contain any “poisonous or deleterious” ingredient rendering them unsafe under the conditions of their intended use.  As with food products and dietary supplements, topical, cosmetic and smokable products containing CBD are considered adulterated and misbranded.  The FDA views the inclusion of CBD in such products to be “poisonous and deleterious” because CBD is the active ingredient in an approved drug, Epidiolex, and has not been subject to a GRAS determination prior to the marketing and approval of that drug or the commencement of related clinical research.  So how are these products still on the market?

Enforcement

Whether marketed as dietary supplements, foods, topical ointments, cosmetics or vape oil, CBD products are subject to the same limitations with respect to marketing and advertising.  Manufacturers are prohibited from stating or implying that the product may treat, cure or prevent any disease.  Doing so renders the product a drug under the FDCA.  When such a product is introduced and moved through interstate commerce, it triggers the FDA’s authority to pursue civil remedies, such as forfeitures and injunctive relief, as well as criminal penalties.  The agency is not limited to one or the other and may pursue both concurrently.  Although not required, the FDA has the option to send the perceived offender a warning letter prior to initiating an enforcement proceeding.  With respect to CBD, the agency has demonstrated a preference for utilizing warning letters in lieu of enforcement proceedings.  This preference, however, is no guarantee.  Neither the absence of a warning letter nor FDA’s inaction should be construed as authorization or approval of a particular product or company.  The FDA retains the authority to bring a civil action seeking forfeiture of inventory and profits as well as injunctive relief or to initiate a criminal prosecution without first issuing a warning at anytime.    Thus, the agency’s apparent preference with respect to these enforcement priorities may change. 

Presently, stakeholders and producers of CBD products are benefiting from this perceived non-enforcement and have been able to avoid scrutiny by steering clear of “drug and disease” claims associated with their products.  When a product manufacturer promotes its product in this fashion however, the FDA has appeared more willing to issue a warning letter but still seems reluctant to initiate enforcement proceedings.  According to the FDA’s recent statements, guidance, and warning letters, CBD products that are marketed with claims other than permissible “structure/function” claims are considered adulterated and misbranded. 21 U.S.C. § 343 (r)(6).  As such, those products are not lawfully introduced into interstate commerce.

A permissible structure/function claim is “a statement that describes the role of a nutrient, compound or ingredient intended to affect the structure or function in humans or that characterizes the documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function.” 21 C.F.R. § 101.93 (f). However, in order to make such structure/function claims, the manufacturer of the product must have substantiation that such statement is “truthful and not misleading.”  21 U.S.C. § 343 (r)(6)(B).  Additionally, and perhaps, most importantly, the statement must not claim “to diagnose, mitigate, treat, cure or prevent a specific disease or class of diseases.”  21 U.S.C. § 343 (r)(6)(C). For purposes of this section, “disease’ is defined as “damage to an organ, part, structure, or system of the body such that it does not function properly…or a state of health leading to such dysfunctioning.”  21 C.F.R. § 101.93 (g).

If the product in question is marketed in connection with a “disease” claim, it will be subject to FDA regulation as a drug, rather than a dietary supplement. Accordingly, the FDA has established certain criteria to determine whether a product makes an impermissible disease claim. 21 C.F.R. § 101.93(g)(2).  A statement will be held to have made a disease claim if it explicitly or implicitly claims that the product:

(i)         Has an effect on a specific disease or class of diseases;

(ii)        Has an effect on the characteristic signs or symptoms of a specific disease or class of diseases, using scientific or lay terminology;

(iii)       Has an effect on an abnormal condition associated with a natural state or process, if the abnormal condition is uncommon or can cause significant or permanent harm;

(iv)       Has an effect on a disease or diseases through one or more of the following: the name of the product; the formulation of the product; citation of a publication; use of the term “disease” or use of pictures;

(v)        Belongs to a class of products intended to diagnose, treat, cure or prevent a disease;

(vi)       Is a substitute for a product that is a therapy for a disease;

(vii)      Augments a particular therapy or drug action that is intended to diagnose, mitigate, treat, cure or prevent a disease or a class of diseases;

(viii)     Has a role in the body’s response to a disease or to a vector of disease;

(ix)       Treats, prevents, or mitigates adverse events associated with a therapy for a disease, if the adverse events constitute disease; or

(x)        Otherwise suggests an effect on a disease or diseases.

21 C.F.R. § 101.93(g)(2).

With respect to structure/function claims, although the FDA does not require pre-approval of such claims, the dietary supplement manufacturer and distributor must provide the FDA with notice of such structure/function claim no later than thirty (30) days after first marketing of the product with such claim. 21 C.F.R. § 101.93(a).

In addition to structure / function claims, the FDA does allow food products, dietary supplements, and related products to make qualified health claims under certain circumstances. 21 C.F.R. § 101.14.  An approved qualified health claim will allow the manufacturer or producer to make certain statements in the product labeling or advertising beyond that of a structure/function claim.  In particular a qualified health claim may actually state that there is a relationship between the respective dietary ingredient and a reduction in risk of disease or a health-related condition.  The proposed qualified health claim must be first submitted to the FDA for review of the supporting evidence and to allow public comment on the claim.  21 C.F.R. § 101.70.

The FDA works in concert with the Federal Trade Commission (FTC) work together under a liaison agreement between the two agencies to enforce the foregoing standards.  In regard to topicals, foods, dietary supplements, and smokable products the FDA has primary responsibility for product labeling, packaging, inserts and promotional materials distributed at the point of sale.  The FTC has responsibility for advertising claims, including print ads, websites and marketing materials. Under this approach, advertising for any product, including dietary supplements, must be truthful, not misleading and substantiated by competent and reliable scientific evidence. See the FTC’s Deception Policy Statement and Advertising Substantiation Policy Statement, available at www.ftc.gov.

Under the FTC’s standards, the net impression conveyed by all the elements of the advertisement, including the text, product name and depictions determine whether an advertisement may be found deceptive.  If an advertisement lends itself to more than one reasonable interpretation, the advertiser must substantiate each interpretation. Thus, if a claim makes a valid “structure/function” claim under applicable FDA standards, but also conveys an implied claim that the product provides a disease benefit, the FTC will look for the advertiser to have substantiation for the implied disease claim even if the ad contains no express reference to disease under the FDA standards.  The FTC also expects that the advertiser will include clear and prominent qualifying information in the ad to disclose the relevant information as to the limited applicability of the advertised benefit.

In addition, the FTC’s standards require that the advertiser have a reasonable basis for all product claims related to the product’s efficacy or safety and that such claims be supported with “competent and reliable scientific evidence.” The FTC defines “competent and reliable scientific evidence” as “tests, analyses, research, studies or other evidence based on the expertise of professionals in the relevant area that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”  There is no fixed formula for the number or type of studies necessary to satisfy this standard. Rather, the amount is dependent upon the nature of the claim.

With respect to CBD infused products, the FDA and the FTC take the position that because CBD is an approved drug and not GRAS certified, those products are adulterated and misbranded.  Therefore, any claims related to the health benefits of CBD as it pertains to those products are deemed unsubstantiated and misleading because they have yet to be supported by “competent and reliable scientific evidence,” substantial clinical research or generally available scientific data and information on the basis of which competent scientists agree that consumption of CBD is generally regarded as safe.   

In the last 18 months, the FDA has increased efforts to send warning letters to companies advertising products associated with claims that CBD may treat, mitigate, cure or prevent a variety of diseases and conditions including cancer, diabetes, obesity, psychological disorders such as anxiety, Alzheimer’s, and most recently, COVID-19.  The FDA views these as unsubstantiated drug and disease claim due to the lack of clinical scientific research which substantiate the link between taking CBD and an improvement or abatement of related symptoms.  The FDA’s enforcement priorities clearly appear to be in this area.  On July 23, 2020, the FDA submitted draft guidance to the White House Office of Management and Budget.  This is a critical final step prior to publication.  The contents of the FDA’s draft guidance is not known.  Until published, the industry is left to speculate whether the agency will continue to rely heavily on the use of warning letters or step up efforts to initiate court proceedings.  More importantly, if the agency’s guidance suggests that the FDA will begin prosecuting offenders for introducing adulterated and misbranded drugs into interstate commerce, will its approach favor criminal prosecution or civil forfeiture or both.  In light of more recent developments and the exponential growth of the market for CBD products, it would stand to reason that the agency’s enforcement priorities will remain somewhat consistent with the current approach.

Regulatory Pathway Moving Forward

In addition to the agency’s draft guidance on enforcement which is anticipated later this year upon completion of review and approval by White House OMB, the FDA issued several publications since March of this year which update the public on the agency’s progress toward more comprehensive regulations.  Congress has also stepped up its efforts to pressure the agency to legitimize the growing CBD market. On July 10, 2019, the House Subcommittee on the Judiciary conducted the first ever public congressional hearing regarding cannabis and related products and compounds.  Following historic event, various members of both houses of Congress proposed bills that would legalize marijuana on a federal level.  Legislation is currently pending in both the House of Representatives and the Senate which would repeal cannabis prohibition and remove it from the list of schedule 1 controlled substances.  Additionally, earlier this month a bill was introduced in the House which would add CBD to the list of ingredients and nutrients which may be legally marketed as dietary supplements.  The passage of any of these bills would change the legal landscape in which CBD based products are marketed and sold to the public. 

Efforts to legitimize the growing number of CBD in the market place gained significant momentum last May when the FDA conducted the first ever public hearing aimed at collecting scientific data and information related to the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds such as CBD.  Following the hearing on May 31, 2019, the FDA open and extended public comment through July 16, 2019.  The FDA received over 4,400 comments demonstrating the growing support and interest in this space.  The FDA recently announced that it is re-opening the public comment period indefinitely as a result of the growing public interest in CBD products.  Yet, despite the wealth of information, the agency, in publications released in March and July of this year, still maintains that it lacks sufficient data related to the safety, efficacy, quality and purity of CBD products presently on the market.

In two separate publications issued by the agency on March 5, 2020, “What You Need to Know (and What We are Working to Find Out) About Products Containing Cannabis and Cannabis-derived Compounds, Including CBD,” and “FDA Advances Work Related to Cannabidiol Products with Focus on Protecting Public Health, Providing Market Clarity,” the agency set forth its analysis and review of the testimony received at the May 31, 2019 public hearing as well as the thousands of comments.  These publications summarized the agency’s view of the gap in scientific data and reliable information related to these products.  Earlier this year, the FDA submitted its joint report to the U.S. House and Senate Committees on Appropriations in response to the Further Appropriations Act of 2020.  The report entitled “Sampling Study of the Current Cannabidiol Marketplace to Determine the Extent That Products are Mislabeled or Adulterated,” noted widespread variability in product purity, potency, and quality.  Of the products tested and examined, 88 percent were found to contain cannabinoids including CBD as indicated on the label.  However, the report went on to explain that there is a wide variation between the amount of CBD actually found in the products and that stated on the label.  Further, many of the products were found to contain excess amounts of THC and various heavy metals, pesticides and contaminants.

The Agency is now moving forward with efforts to test an additional 1,000 to 3,000 products by 2021.  The intent is to help fill in the information gaps noted by the agency with respect to the safety profile of CBD.   Information from clinical research related to approved drugs Epidiolex as well as AIDS drugs, Marinol and Syndros which utilize a synthetic version of THC, and Cesamet which utilizes nabilone, a compound similar in structure to THC, suggests that CBD and other cannabinoids may pose significant risk of liver damage, male reproductive toxicity, diarrhea, irritability, agitation, appetite suppression, drowsiness, and inattentiveness among other side effects.  These risks may also be exacerbated by interaction with other drugs and/or long term consumption and exposure.  The extent and magnitude of these potential risks and side effects is a key component of the agency’s approach to regulating and legitimizing consumer products containing CBD.

The agency has also published draft guidance for conducting cannabis related research and clinical trials.   This guidance aims to assist producers in identifying and developing raw ingredients into a product of consistent quality, purity and potency and facilitate more robust and informative analysis and research.  The guidance document suggests and encourages quantitative analysis of the cannabinoids, flavonoids, and terpenes and development of a chemical fingerprint to ensure batch to batch consistency.  The FDA’s guidance also suggests following the recommendations of the U.S. Pharmacopeia for testing for pesticides, microbials and identification of maximum tolerated dosage.  In addition to this guidance, the U.S. Department of Commerce’s National Institute of Safety and Technology (NIST) announced a quality assurance program for cannabis laboratories in July of 2020.  The NIST program is aimed at development of consistent and reliable methods of analysis to be utilized by the cannabis industry. 

In an even bolder move, the FDA has inched closer to legitimizing CBD related consumer products with the issuance of draft guidance for the production of generic oral CBD solution.  On September 24, 2020, the agency published notice in the Federal Register of its proposed guidance for generics of the approved drug, Epidiolex.  Under the proposed guidelines producers and stakeholders may obtain a waiver of the requirement of an in vivo bioequivalence study provided the product in question meets certain criteria.  In order to obtain the waiver, the product must be comprised of the same active ingredient in the same concentration as the reference listed drug, must be derived from the same plant species, Cannabis Sativa L (industrial hemp) as verified by DNA bar coding, and collected from the same plant parts utilizing Good Agricultural Collections Practices.  The generic and its active ingredient must also be shown through verified lab testing to contain no more than .1% THC.  This is a monumental step forward, and in combination with the recent guidance related to clinical research and the NIST quality assurance program, signals a clear path to the legal marketplace. 

Conclusions

Consumer products containing CBD present a promising and exciting economic opportunity in the United States.  The increasing demand for such products and the exponentially expanding marketplace also create significant gaps and impairment to ensuring product safety and quality.  Knowing and understanding the developing regulatory landscaping is critical to avoiding unwanted federal intervention and oversight.   As these new requirements and criteria come into sharper focus, competition within the industry will weed out and separate the stakeholders and producers who will define the industry for years to come.   Until that time however, the growing number of CBD consumer products available in stores from Alabama to Oregon remain illegal in the eyes of the FDA.  All of these products are considered adulterated and/or misbranded and subject to civil forfeiture as well as criminal prosecution.

The fact that the FDA is not actively moving to take these products out of stores and keep them away from consumers does not mean and should not be viewed or misconstrued as formal approval.  The agency is not obligated to warn producers of CBD products before undertaking enforcement proceedings.  The mere fact that the maker of your favorite CBD tincture or balm has thus far avoided being on the receiving end of an FDA warning letter means nothing.  The fact that consumers are still able to buy CBD products at the corner Chevron or Circle K does not mean that the FDA views those products as safe and effective.  This means only that the agency has decided against taking any action for a multitude of reasons none of which are its review or approval of the safety or efficacy of the product itself.

Notwithstanding the purposeful non-enforcement position undertaken by the FDA up to this point, those who desire to jump into this hot market now are not without hope or guidance.  The FDA has taken steps to loosen the restraints and ease the rules for getting products to market.  Most recently, an investigational new drug application was approved for CardiolRX, a CBD based cardiovascular drug which is set to commence late stage clinical trials on COVID-19 patients with underlying cardiovascular conditions.  The agency’s most recent draft guidance has clarified the approach for conducting such studies and has simplified the regulatory pathway for manufacturing generic versions of approved CBD drugs.  Assuming an increasing number stakeholders latch on to this approach, an over the counter monologue for CBD products could be approved making CBD the aspirin of the 21^st century.  Taking this approach may also hasten the move to legalize all cannabis products nationwide without crippling the agency and leaving federal authorities without the means or resources to make sure those products on the market are safe for public consumption.

In the interim, manufacturers should take head of the agency’s recent guidance as well as stay abreast of warning letters issued to other stakeholders.  Such public statements by the FDA are intended to not only discourage further conduct by the recipient but inform others of the agency’s thinking and analysis.  By curtailing branding, marketing, and advertising accordingly, CBD product manufacturers may lessen their risks but cannot avoid or eliminate the possibility of FDA intervention.  The safest approach is to undertake efforts to conduct validating clinical research, which may be expensive and cost prohibitive, or to obtain an approval of generic use of an already approved product such as Epidiolex which may have limited application.  Absent such an approach or further efforts by the FDA to open additionally regulatory pathways to the marketplace, CBD remains risky business.