BY GARY MICHAEL SMITH, ESQ.

Hemp is returning to America’s farms after decades of prohibition, and CBD (THC’s less fun non-psychoactive cousin) is all the rage.  These new hemp and CBD industries seek clarity out of the schizophrenic alphabet soup of federal agencies and regulations.

Small wonder there is confusion, because through the end of 2018, the federal Drug Enforcement Agency (“DEA”) was saying one thing, the federal Food and Drug Administration (“FDA”) another, and Congress had to step in and calm it all down.  Know that this is still subject to change, but here is where things currently stand:

Pre-2018 US Farm Bill …

At the start of 2018, the DEA held to the argument that hemp and marijuana were the same thing and that all marijuana extracts, psychoactive or not, were illegal.

Then in June 2018, the DEA issued a clarifying statement that it was going to acknowledge a distinction between THC and CBD; the DEA was still going to regard all extracts from marijuana as Schedule 1 narcotics (CBD included); and that the DEA would not regard CBD derived from hemp as the same thing as CBD derived from marijuana.

Then, in September 2018, the DEA issued a memorandum announcing that drugs including CBD with THC content below 0.1% would be rescheduled from Schedule 1 to Schedule 5. Rescheduling allows CBD products, such as Epidiolex, to be sold through traditional pharmacies with a doctor’s prescription so long as the product is first approved by the FDA.

The DEA’s September re-classification of CBD to Schedule 5 meant that the DEA still failed to distinguish CBD products derived from lawful hemp as being exempted from DEA’s authority.  So, Congress stepped in with the Agriculture Improvement Act of 2018 (aka the “2018 Farm Bill”).

On December 20, 2018, the federal government altogether removed “industrial hemp” and all derivatives of cannabis with less than 0.3% THC – including CBD products – from the Controlled Substances Act.  This means that CBD products are no longer an inherently illegal substance under federal law, so long as they contain less than 0.3 percent THC.  They are altogether de-scheduled.  CBD products with THC content above 0.3% (aka marijuana) remain classified as a Schedule 1 controlled substance, and subject to severe criminal sanctions.

So, CBD derived from hemp is legal, right?  Well…kind of.

In wake of the 2018 Farm Bill, the FDA (the agency that enforces the federal Food, Drug, and Cosmetic Act) issued its own clarifying statement in December 2018.  Per the FDA, it remains illegal under federal law to introduce into interstate commerce CBD products that are “marketed with a claim of therapeutic benefit, or with any other disease claim,” without the product first having been “approved by the FDA for its intended use.”  This rule also applies to any other product marketed as a drug for human or animal use.   Basically, same as all those “secret formula herbal diet pills” you see advertised on late night TV, hemp products (such as CBD) that make health claims must acquire FDA approval for human or animal use before they are marketed in the U.S.

So long as I don’t make health claims, I can sell CBD-infused products?  Well…no.

In that same clarifying statement, the FDA also explained that it remains illegal under federal law to add CBD to any food products.  Here is what outgoing FDA Commissioner Scott Gottlieb, M.D. wrote in the FDA clarifying statement:

Additionally, it’s unlawful under the FD&C 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. 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. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.”

What Dr. Gottlieb’s successor may do at the FDA to address this problem is anyone’s guess.  So, at least for the time-being, it appears you can sell hemp-derived CBD alone, provided you make no claims about it.  The moment you make a health claim or add it to food, you have once again tripped into federal felony territory.

For now (and possibly forever), the FDA regulates cannabis products under the federal Food, Drug and Cosmetics Act, hemp’s removal from the Controlled Substance Act of 1970 notwithstanding. All cannabis products marketed with a therapeutic claim, whether sourced from hemp or not (scientists reported in early March 2019 that they gene-spliced yeast to produce THC, so yes, this Franken-yeast is subject to the law too), must receive FDA approval before it can be sold.

If all this talk about CBD, a wonderful anti-inflammatory, gives you a headache just reach for a bottle of…well, never mind.

Gary Smith head shotGary Michael Smith is an attorney and arbitrator and partner in Phoenix Arizona-based Smith Saks Kuzmich PLC.   He is also a founding director and current president of the Arizona Cannabis Bar Association.  He can be reached at smith@sskattorneys.com.

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