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            CONFIDENTIAL FREE INITIAL PHONE CONSULTATIONS

            Hey bud, is that cannabis product legal?

            There has been exponential growth in the development of medicinal and therapeutic consumer products derived from cannabis and its components, including cannabidiol (CBD), in recent years.  However, some are marketing products containing cannabis and cannabis-derived compounds in ways that violate the Federal Food, Drug and Cosmetic Act (FD&C Act) and/or the Federal Trade Commission (FTC Act), or similar state laws, giving rise to substantial regulatory exposure and/or civil tort liability.  The following is an overview of the cannabis, marijuana, and hemp product regulations by the FDA and FTC, as of September 23, 2019.

            Cannabis and marijuana

            Cannabis is a plant of the Cannabaceae family and contains more than eighty biologically active chemical compounds.  The most commonly known compounds are delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD).  Parts of the Cannabis sativa plant have been controlled under the Controlled Substances Act (CSA) since 1970 under the drug class "Marihuana" (commonly referred to as "marijuana") [21 U.S.C. 802(16)].  "Marihuana" is listed in Schedule I of the CSA due to its high potential for abuse, which is attributable in large part to the psychoactive effects of THC, and the absence of a currently accepted medical use of the plant in the United States.

            2018 Farm Bill definition of hemp

            At the federal level, the Agriculture Improvement Act of 2018, Pub. L. 115-334, (the 2018 Farm Bill) was signed into law on Dec. 20, 2018.  Among other things, this law changed certain federal authorities relating to the production and marketing of hemp, defined as "the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis."  These changes included removing hemp from the CSA, which means that cannabis plants and derivatives that contain no more than 0.3 percent THC on a dry weight basis are no longer controlled substances under federal law.

            The 2018 Farm Bill, however, explicitly preserved FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the FD&C Act and section 351 of the Public Health Service Act (PHS Act).  The FDA treats products containing cannabis or cannabis-derived compounds as it does any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance.  This is true regardless of whether the cannabis or cannabis-derived compounds are classified as hemp under the 2018 Farm Bill.

            FDA approval

            The FDA agency has not approved a marketing application for cannabis for the treatment of any disease or condition.  The FDA has, however, approved one cannabis-derived and three cannabis-related drug products, Epidiolex, Marinol, Syndros, and Cesamet.  These approved products are only available with a prescription from a licensed healthcare provider.

            Under the FD&C Act, any product intended to have a therapeutic or medical use, and any product (other than a food) that is intended to affect the structure or function of the body of humans or animals, is a drug.  Drugs must generally either receive premarket approval by FDA through the New Drug Application (NDA) process or conform to a "monograph" for a particular drug category, as established by FDA's Over-the-Counter (OTC) Drug Review.  CBD was not an ingredient considered under the OTC drug review.  An unapproved new drug cannot be distributed or sold in interstate commerce.

            Selling unapproved products with unsubstantiated therapeutic claims is a violation of federal law.

            Selling CBD products

            The legality of selling CBD products depends, among other things, on the intended use of the product and how it is labeled and marketed.  Even if a CBD product meets the definition of "hemp" under the 2018 Farm Bill, it still must comply with all other applicable laws, including the FD&C Act.

            Selling THC or CBD products as dietary supplements

            The FDA has concluded that THC and CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)].  Under that provision, if a substance (such as THC or CBD) is an active ingredient in a drug product that has been approved under section 505 of the FD&C Act [21 U.S.C. § 355], or has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, then products containing that substance are excluded from the definition of a dietary supplement.  The FDA considers a substance to be "authorized for investigation as a new drug" if it is the subject of an Investigational New Drug application (IND) that has gone into effect.  Under the FDA’s regulations (21 CFR 312.2), unless a clinical investigation meets the limited criteria in that regulation, an IND is required for all clinical investigations of products that are subject to section 505 of the FD&C Act.

            There is an exception to section 201(ff)(3)(B) if the substance was "marketed as" a dietary supplement or as a conventional food before the drug was approved or before the new drug investigations were authorized, as applicable.  However, the FDA has concluded that this is not the case for THC or CBD.

            When a substance is excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act, the exclusion applies unless the FDA, in the agency’s discretion, has issued a regulation, after notice and comment, finding that the article would be lawful under the FD&C Act.  To date, no such regulation has been issued for any substance.

            Ingredients that are derived from parts of the cannabis plant that do not contain THC or CBD might fall outside the scope of this exclusion, and therefore might be able to be marketed as dietary supplements.  However, all products marketed as dietary supplements must comply with all applicable laws and regulations governing dietary supplement products.  For example, manufacturers and distributors who wish to market dietary supplements that contain "new dietary ingredients" (i.e., dietary ingredients that were not marketed in the United States in a dietary supplement before October 15, 1994) generally must notify FDA about these ingredients (see section 413(d) of the FD&C Act [21 U.S.C. § 350b(d)]).  Generally, the notification must include information demonstrating that a dietary supplement containing the new dietary ingredient will reasonably be expected to be safe under the conditions of use recommended or suggested in the labeling.  A dietary supplement is adulterated if it contains a new dietary ingredient for which there is inadequate information to provide reasonable assurance that the ingredient does not present a significant or unreasonable risk of illness or injury (see section 402(f)(1)(B) of the FD&C Act [21 U.S.C. 342(f)(1)(B)]).

            Numerous other legal requirements apply to dietary supplement products, including requirements relating to Current Good Manufacturing Practices (CGMPs) and labeling.

            Selling a food to which THC or CBD has been added

            Under section 301(ll) of the FD&C Act [21 U.S.C. § 331(ll)], it is prohibited to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which has been added a substance which is an active ingredient in a drug product that has been approved under section 505 of the FD&C Act [21 U.S.C. § 355], or a drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public.  There are exceptions, including when the drug was marketed in food before the drug was approved or before the substantial clinical investigations involving the drug had been instituted or, in the case of animal feed, that the drug is a new animal drug approved for use in feed and used according to the approved labeling.  However, the FDA has concluded that none of these is the case for THC or CBD.  The FDA has therefore concluded that it is a prohibited act to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which THC or CBD has been added.

            When this statutory prohibition applies to a substance, it prohibits the introduction into interstate commerce of any food to which the substance has been added unless the FDA, in the agency’s discretion, has issued a regulation approving the use of the substance in the food (section 301(ll)(2) of the FD&C Act [21 U.S.C. § 331(ll)(2)]).  To date, no such regulation has been issued for any substance.

            Ingredients that are derived from parts of the cannabis plant that do not contain THC or CBD might fall outside the scope of 301(ll), and therefore might be able to be added to food.  For example, certain hemp seed ingredients can be legally marketed in human food.  However, all food ingredients must comply with all applicable laws and regulations.  For example, by statute, any substance intentionally added to food is a food additive, and therefore subject to premarket review and approval by FDA, unless the substance is generally recognized as safe (GRAS) by qualified experts under the conditions of its intended use, or the use of the substance is otherwise excepted from the definition of a food additive (sections 201(s) and 409 of the FD&C Act [21 U.S.C. §§ 321(s) and 348]).  Aside from the three hemp seed ingredients mentioned above, no other cannabis or cannabis-derived ingredients have been the subject of a food additive petition, an evaluated GRAS notification, or have otherwise been approved for use in food by the FDA.  Food companies that wish to use cannabis or cannabis-derived ingredients in their foods are subject to the relevant laws and regulations that govern all food products, including those that relate to the food additive and GRAS processes.

            Selling hulled hemp seed, hemp seed protein powder, and hemp seed oil in human food

            In December 2018, the FDA completed its evaluation of three generally recognized as safe (GRAS) notices for the following hemp seed-derived food ingredients: hulled hemp seed, hemp seed protein powder, and hemp seed oil.  The FDA had no questions regarding the company’s conclusion that the use of such products as described in the notices is safe.  Therefore, these products can be legally marketed in human foods for the uses described in the notices, provided they comply with all other requirements.  These GRAS notices related only to the use of these ingredients in human food.  To date, the FDA has not received any GRAS notices for the use of hemp-derived ingredients in animal food.

            Hemp seeds are the seeds of the Cannabis sativa plant.  The seeds of the plant do not naturally contain THC or CBD.  The hemp seed-derived ingredients that are the subject of these GRAS notices contain only trace amounts of THC and CBD, which the seeds may pick up during harvesting and processing when they are in contact with other parts of the plant.  Consumption of these hemp seed-derived ingredients is not capable of making consumers "high."

            The GRAS conclusions can apply to ingredients for human food marketed by other companies, if they are manufactured in a way that is consistent with the notices and they meet the listed specifications.  Some of the intended uses for these ingredients include adding them as source of protein, carbohydrates, oil, and other nutrients to beverages (juices, smoothies, protein drinks, plant-based alternatives to dairy products), soups, dips, spreads, sauces, dressings, plant-based alternatives to meat products, desserts, baked goods, cereals, snacks and nutrition bars.  Products that contain any of these hemp seed-derived ingredients must declare them by name on the ingredient list.

            These GRAS conclusions do not affect the FDA’s position on the addition of CBD and THC to food.

            Cannabis and cannabis-derived ingredients in cosmetics

            A cosmetic is defined in 201(i) as "(1) articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such articles; except that such term shall not include soap."

            Under the FD&C Act, cosmetic products and ingredients are not subject to premarket approval by the FDA, except for most color additives.  Certain cosmetic ingredients are prohibited or restricted by regulation, but currently that is not the case for any cannabis or cannabis-derived ingredients.  Ingredients not specifically addressed by regulation must nonetheless comply with all applicable requirements, and no ingredient – including a cannabis or cannabis-derived ingredient – can be used in a cosmetic if it causes the product to be adulterated or misbranded in any way.  A cosmetic generally is adulterated if it bears or contains any poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling, or under such conditions of use as are customary or usual (section 601(a) of the FD&C Act [21 U.S.C. § 361(a)]).

            If a product is intended to affect the structure or function of the body, or to diagnose, cure, mitigate, treat or prevent disease, it is a drug, or possibly both a cosmetic and a drug, even if it affects the appearance.

            The FDA can take action if it has information that an ingredient or cosmetic product is unsafe to consumers.

            FDA and FTC action against cannabis or cannabis-related products

            The FDA and FTC have sent warning letters in the past to companies illegally selling CBD products that claimed to prevent, diagnose, treat, or cure serious diseases, such as cancer.  Some of these products were in further violation of the FD&C Act because they were marketed as dietary supplements or because they involved the addition of CBD to food.

            When a product is in violation of the FD&C Act, the FDA considers many factors in deciding whether or not to initiate an enforcement action.  Those factors include, among other things, agency resources and the threat to the public health.  The FDA also may consult with its federal and state partners in making decisions about whether to initiate a federal enforcement action.

            In short, the FTC warns that companies should review their product promises – including representations conveyed through testimonials – to ensure they’re backed up by competent and reliable scientific evidence.

            Importing or exporting cannabis-containing or cannabis-derived products

            The Drug Enforcement Administration (DEA) is the federal agency responsible for enforcing the controlled substance laws and regulations in the U.S. and, as such, should be consulted with respect to any regulations/requirements they may have regarding the import or export of products containing cannabis.

            Regarding imports, if it appears that an article is adulterated, misbranded, in violation of section 505 of the FD&C Act, or prohibited from introduction or delivery for introduction into interstate commerce under section 301(ll) of the FD&C Act, such article will be refused admission (see section 801(a)(3) of the FD&C Act [21 U.S.C. § 381(a)(3)]).

            State CBD Label and Warning Requirements

            There is no known CBD product that is currently labeled in full compliance with the requirements of all states that presently allow the sale of ingestible CBD products.

            CBD legalization at the state level does not preclude FDA enforcement or civil liability based on violation of federal law.