United States: The 2018 Farm Bill Preserves FDA Right To Regulate Cannabis Products

If the FDA chooses to exercise its enforcement discretion, then the FDA will likely not bring regulatory action to enforce the provisions of the Food, Drug and Cosmetic Act that arguably apply.

Last year was a record year for cannabis. Canada passed the Cannabis Act, making adult-use cannabis legal there. The FDA approved a cannabidiol-based medicine, Epidiolex. And the President signed the Agriculture Improvement Act of 2018, aka the 2018 Farm Bill, into law on December 20, 2018.

While the 2018 Farm Bill granted the U.S. Department of Agriculture the ability to regulate hemp, it also preserved the right for the U.S. Food and Drug Administration (FDA) to regulate products containing cannabis or cannabis-derived compounds. The FDA regulates products such as human and animal drugs, biological products, cosmetics, food and animal feed, among other things. So any inclusion of cannabis or cannabis-derived compounds, like CBD, in any of those types of products would be regulated by the FDA. The FDA has stated that this is true regardless of the source of the cannabis substance, be it hemp or marijuana.

The FDA has expressed concern about cannabis-containing products that are marketed as having a therapeutic benefit, such as preventing or easing nausea, improvement of muscle spasms or treating chronic pain. The FDA considers these types of claims to be "drug" claims and requires that the product be approved by the FDA before it is sold across state lines. In addition, the FDA finds it unlawful to sell food containing CBD or THC in interstate commerce or to market CBD or tetrahydrocannabinol (THC) products as a dietary supplement. This is regardless of whether the CBD is hemp-derived. And the FDA takes a broad view of what is a "food" or "supplement," which would include chocolates, gummies or other edibles or "medibles," as well as pet and animal foods, treats and feed. After the approval of Epidiolex and clinical investigations concerning Sativex (each containing CBD) and in light of previous approvals of Marinol and Syndros (each containing THC), the FDA considers CBD to be an active pharmaceutical ingredient, and it is illegal to introduce drug ingredients into the food supply or a dietary supplement. While there is an exception for substances that were "marketed as" dietary supplements or marketed in food before the drug was approved, the FDA's position is that none of these exceptions apply to CBD or THC.

Should the FDA find that cannabis-containing products are being sold as food or marketed as dietary supplements or that the product is being marketed as having a therapeutic benefit, the FDA may take enforcement action. The FDA will consider, among other things, whether it perceives of a threat to public health in deciding whether to take enforcement action. This means that the FDA may issue a warning letter to the company, officially reprimanding it publicly for violating its rules. It could also seize products as adulterated (containing poisonous or deleterious substances) or misbranded (labeling or advertising that is false or misleading in any way). The FDA could also seek an injunction to prevent repeated violations or recommend criminal prosecution.

The FDA's Enforcement Discretion

As of right now, if companies are marketing cannabis-containing products in-state and not making any claims about therapeutic benefits, the FDA has given every indication that it intends to exercise enforcement discretion and not actively seek to take enforcement efforts provided no "drug claims" are made. If the FDA chooses to exercise its enforcement discretion, then the FDA will likely not bring regulatory action to enforce the provisions of the Food, Drug and Cosmetic Act that arguably apply. It may choose to exercise this discretion for all in-state sales or it may choose to do so until it has time to consider any changes or other approaches to address concerns and challenges surrounding sale and marketing of cannabis-containing products. All that being said, the FDA would likely take action in cases where it perceives there would be patient or customer risk or harm. Outside of relying on the FDA's enforcement discretion as protection, the FDA has some pathways to allow for lawful introduction of cannabis-containing products into interstate commerce. One pathway is to submit a new drug application and obtain approval, like GW Research Ltd. did with Epidiolex. Another pathway is for foods that are derived from parts of the hemp plant that do not contain CBD or THC that the FDA considers generally recognized as safe (or GRAS). These include hulled hemp seeds, hemp seed protein and hemp seed oil. The FDA is also planning to hold a public meeting in the near future to hear about the industry's challenges and experiences with CBD and other cannabis-containing products.

Congress' Request to the FDA

On January 15, 2019, Oregon Democrat Senators Ron Wyden and Jeff Merkley sent FDA Commissioner Gottlieb a letter asking that the FDA "immediately update federal regulations governing the use of certain hemp-derived ingredients in food, beverage or dietary supplements."  In the senators' view, the current regulations are outdated in light of the 2018 Farm Bill. In particular, the Senators are concerned that producers are not currently able to take full advantage of the industrial hemp market by being able to sell products with hemp-derived CBD across state lines. The intent of Congress was "to ensure that both U.S. producers and consumers have access to a full range of hemp-derived products, including hemp-derived cannabinoids." The senators have posed four questions to the Commissioner that seek to clarify the FDA's authority in production and marketing of hemp and its derivative, what lawful pathway the FDA believes are available for approval of these products, any circumstances where the FDA may permit hemp and its derivatives as a food, beverage or supplement, and whether FDA will issue a regulation that would allow these products to be sold across state lines. We suspect that Congress will continue to pressure Gottlieb on the questions.

Duane Morris will continue to follow these developments.

For Further Information

If you have any questions about this Alert, please contact  Frederick R. Ball Carolyn A. Alenci; any of the attorneys in our Cannabis Industry Group or Life Sciences Industry Group; or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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