Patchwork quilt of regulations could further complicate CBD picture if FDA doesn’t act quickly

The issue is already balkanized enough that it’s hard for even seasoned observers to keep up.  At the Hemp-CBD Supplement Congress hosted by the American Herbal Products Association, which is going on Thursday and Friday this week in Denver, attorney Marc Ullman gave a talk on regulations in the sector.  Ullman, who is of counsel with the firm Rivkin Radler, noted that, try as he might, some of his slides on the subject were out of date, even though he assembled them only recently.

FDA says CBD is illegal, but doesn’t enforce that idea

FDA has moved with deliberate speed on the question of CBD regulation.  The agency first took a stance on the issue of isolated CBD in supplement products several years ago in the form of an amended Q&A document on marijuana. At that time the agency took to view that since CBD had been investigated as a drug, it was precluded from being a legal dietary ingredient.

By deliberate speed I mean very little movement at all.  Companies marketing CBD products that make non-compliant disease claims can expect to get a warning letter. But to anyone’s knowledge, NONE of the hundreds of companies selling the thousands of CBD products on the market have been cited for technically breaking the law in this way.

This implies that FDA has adopted a hands off approach to this category of products. This makes sense in that the agency has gotten pressure from members of Congress to find a legal pathway for these products to come to market.  It wouldn’t look good in the meantime to be confiscating products and citing perpetrators.  To observers this looks a lot like an official policy of enforcement discretion, and outgoing FDA Commissioner Scott Gottlieb said as much in what amounted to his farewell address.

The agency was quick to say after his departure that no such policy exists​. Uh huh. Sure.

States, local agencies step into breach

Vacillation at the federal level hasn’t stopped some other law enforcement officials at other levels of the government from stepping up to the plate.  As Ullman detailed in yesterday’s session, a number of states, counties and even city jurisdictions have taken FDA at its word—i.e., that CBD is an illegal dietary ingredient—and are acting on that premise.

“If the New York City health department inspects a facility, they won’t be ‘looking’ for CBD, but if they find CBD products, they will impound them,” ​Ullman told the sold-out audience of the event, which numbered about 150.

Current market rewards rule breakers

Early adopters always tend to be risk takers. But the current situation rewards not just boldness, but a willingness to venture into legally tenuous areas. The market as it stands is such that companies willing to bend the rules (or those who have never bothered to find out what the rules are) have an advantage.  

“We have this hodgepodge of state and local laws, massive marketplace confusion, and it creates distorted market.  Big picture: It rewards scofflaws,” ​Ullman said.

It remains to be seen whether FDA can find a way to move more quickly on the CBD question than it did on GMPs, on adverse event reporting, or on sorting out the NDI issue. Can the agency issue some sort of interim rule on CBD within, say, six months? I’ll take the over on that.  But what is sure is that with every passing month, the situation will get more complicated.