Confusing web of laws muddles CBD industry – Long Island Business News

Marc Ullman: ‘There’s a fallacy that the Farm Bill made everything having to do with what we’ll call industrial hemp legal. The problem is that it’s a lot more complicated than that.’ (Photo by Judy Walker)

Products containing CBD, or cannabidiol, are suddenly popping up everywhere. The cannabis-derived compound is appearing in food, drinks, dietary supplements, creams and pet products, and they’re being sold in retailers ranging from health food stores and cafes to salons and spas to bodegas and gas stations.

But despite the explosion in interest in products containing CBD, a confusing web of contradictory laws and inconsistent enforcement has left manufacturers and retailers scratching their heads about whether they should jump into the market. And a lack of education in the marketplace means that in many cases consumers and retailers are clamoring for CBD without a clear understanding of what they’re getting (see Buyer beware: The CBD market is a bit like the Wild West).

The sudden swell in CBD products stems in large part from the passage of the 2018 Farm Bill last December. CBD is derived from the hemp plant, which prior to the Farm Bill was classified as a Schedule I controlled substance, a category that includes dangerous drugs such as heroin. The bill removed from the controlled substance list cannabis and cannabis derivatives with no more than 0.3 percent concentration of THC, the psychoactive component in marijuana.

“But there’s a fallacy that the Farm Bill made everything having to do with what we’ll call industrial hemp legal. The problem is that it’s a lot more complicated than that,” said attorney Marc Ullman, who is of counsel to Uniondale-based Rivkin Radler. Ullman represents clients in matters relating to Food and Drug Administration regulatory issues with a focus on the dietary supplement/natural products industry. 

What the Farm Bill did was take the Drug Enforcement Administration out of the picture, which is an enormous break for the hemp trade, Ullman said. “As long as you are below 0.3 percent THC, the plant and things coming from the plant are not considered controlled substances,” he said. “So the DEA can’t seize your property and take your money from the bank.”

But what the Farm Bill did not do was impact other laws. The Food, Drug and Cosmetic Act of 1938, which gave authority to the Food and Drug Administration to oversee the safety of food, drugs, medical devices and cosmetics, still applies. 

“And when it comes to CBD, the FDA says it’s not a lawful ingredient for food or dietary supplements,” Ullman said. 

The FDA in July issued an update about where it stands on CBD. 

“There are many unanswered questions about the science, safety and quality of products containing CBD….” the agency wrote. “Other than one prescription drug product [Epidiolix] to treat rare, severe forms of epilepsy, the FDA has not approved any other CBD products…. There is very limited available information about CBD, including about its effects on the body. The FDA is working to learn more about the safety of CBD and CBD products.” 

But while the FDA says CBD can’t go into food and dietary supplements, “it’s doing nothing to enforce its position,” Ullman said. And this is creating confusion among manufacturers and retailers, who don’t show how to proceed. Companies in industries such as nutritional supplements are feeling market pressure to get into the CBD trade.

In this Sept. 25, 2018 photo, bottles of maple syrup and olive oil infused with CBD marijuana extract are displayed for sale at the Village Bloomery medical cannabis dispensary in Vancouver, British Columbia. (AP Photo/Ted S. Warren)

“There is consumer demand, and their competitors are reaping the benefits of selling these products and using that income to be able to discount products in the areas where they do compete,” Ullman said. “All of a sudden competitors have this pool of resources, which makes it difficult to compete against them. The lack of consistency on the federal level has really distorted the marketplace.”

And a lack of enforcement has led to a “Wild West” atmosphere, “which is why we see stories of the products being all over the place,” Ullman said. A study by a Penn Medicine researcher, for instance, found that nearly 70 percent of CBD products sold online were either over- or under-labeled, meaning they had lower or higher concentrations of CBD than stated.

Although the FDA is largely not enforcing its position, there is one exception: It is cracking down in cases where CBD products make claims that they will treat, cure, prevent or mitigate a disease or condition. 

“Unlike drug products approved by the FDA, unapproved CBD drug products have not been subject to FDA review as part of the drug approval process, and there has been no FDA evaluation regarding whether they are safe and effective to treat a particular disease, what the proper dosage is, how they could interact with other drugs or foods, or whether they have dangerous side effects or other safety concerns,” the agency stated in its update. “The FDA’s top priority is to protect the public health, and that includes making sure consumers know about products that put their health and safety at greatest risk, such as those claiming to prevent, diagnose, treat, or cure serious diseases.”

In addition to its interest in protecting public health, the FDA is quick to crack down on unsubstantiated claims because it is protective of drug companies – such as GW Pharmaceuticals, maker of Epidiolex – that invest more than $1 billion from start to finish to develop and get a drug approved.

“If the FDA isn’t protecting that market, why would anyone invest a billion dollars to develop new drugs?” Ullman said. 

Beyond the inconsistency on the federal level, things get further muddled on the state and local level. In the wake of the Farm Bill, some states have not amended their controlled substance laws, so CBD is still considered a controlled substance. One such state is Nevada, even though it has legalized recreational marijuana. 

“The state authorities say they won’t take any enforcement action against CBD, but several counties in Nevada have stated that since the FDA advises food and supplements containing CBD are illegal, they will take enforcement action,” Ullman said. “So it depends on what county you’re in.”

While New York State shows no signs of taking enforcement action on CBD, “the New York City Department of Health has taken the position that they’re going to go into coffee shops, bodegas and health food stores that are selling things like CBD brownies or coffee with CBD and take them off the shelf and embargo them, whether these products make any claims or not,” Ullman said. The city began enforcing the CBD ban July 1.

So retailers in the five boroughs who stock CBD items run the risk of having them confiscated. “There’s also the concern that if they don’t know who they’re buying their brownies from, what’s the quality?” Ullman said. “What if there’s an adverse consumer event?

“It’s a tough time, and I lay a lot of this on the FDA,” Ullman continued. “We have this repeated absolute pronouncement that CBD is not a lawful ingredient in food or dietary supplements, and then the agency does virtually nothing about it.”


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