The bill, known as the Hemp Farming Act of 2018, would legalize hemp, removing it from the federal list of controlled substances and allowing it to be sold as an agricultural commodity.  “By legalizing hemp and empowering states to conduct their own oversight plans, we can give the hemp industry the tools necessary to create jobs and new opportunities for farmers and manufacturers around the country,” McConnell said in a statement last week introducing the bill. The bill has bipartisan support.

This bill also seeks to end the grey area surrounding hemp-derived CBD extracts: “The term ‘hemp’ means 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.”

What does this mean?

As I have previously stated, my hope was that this bill would not only deschedule industrial hemp as a controlled substance but provide clarity regarding hemp-derived CBD. This bill has done exactly that and now what remains to be seen is can Sen. McConnell get this over the finish line in its current form?

 

Yesterday, Senator Mitch McConnell spoke to a group of hemp advocates in his home state of Kentucky that he will introduce legislation to legalize industrial hemp as an agricultural commodity.  If approved, Sen. McConnell’s legislation would allow states to control their own hemp regulations by removing federal restrictions.

What does this mean?

While industrial hemp has benefited from the 2014 Farm Bill and related state programs, there is still a considerable grey area surrounding the legality and commercialization of industrial hemp, including CBD, in the United States.  The Federal government has long taken the position that general commercialization of industrial hemp is NOT permitted in all 50 states and the DEA’s new definition for “Marihuana Extract” includes: “an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.” It should be noted that this definition of “Marihuana Extract” includes CBD isolate that is extracted from industrial hemp.  While Sen. MConnell’s legislation has not yet been released as of posting of this blog, the hope is that it will provide clarity on not only legalizing industrial hemp but also providing clear guidance on the legality of cannabinoids derived from industrial hemp.

Edibles

The deadline for compliance with new edible restrictions and labeling requirements is fast-approaching. Infused product manufacturers (medical and retail) may no longer produce, transfer, or donate any edible marijuana products in the shape of a human, animal, or fruit or shapes that bear the likeness or contain characteristics of a realistic or fictional human, animal, or fruit, including artistic, caricature, or cartoon renderings. Also beginning on October 1, 2017, no medical marijuana center or retail marijuana store may sell any non-compliant edible product. Any marijuana business with non-compliant edible products must follow waste disposal rules.

Potency Testing

Also beginning on October 1, 2017, each container holding medical and retail marijuana product must be labeled with the potency of THC and CBD. The potency must be expressed in milligrams and either be:

  • in a font size that is not less than 10 point font and at least two font sizes larger than the surrounding label text, and must be bold, and enclosed within an outlined shape such as a circle or square; or
  • highlighted with a bright color such as yellow.

These new potency labeling regulations apply to medical and retail establishments. Operators have been aware of these rules for some time and should be in compliance ahead of the October 1 deadline. We suggest operators use the next few weeks to double check inventory for old stock of non-compliant product.

The US Department of Agriculture provided statements of principals on industrial hemp, in consultation with the DEA and the FDA, to inform the public how Federal law applies to activities associated with industrial hemp that is grown in accordance with the Agricultural Act of 2014.  Generally, the statement of principles are consistent with my previous posts about the inability to generally commercialize industrial hemp grown in the US in compliance with Federal law.  I have excerpted a few statements that industrial hemp businesses should pay close attention to, with a few comments from me in italics:

  • For purposes of marketing research by institutions of higher education or State departments of agriculture (including distribution of marketing materials), but not for the purpose of general commercial activity, industrial hemp products may be sold in a State with an agricultural pilot program or among States with agricultural pilot programs but may not be sold in States where such sale is prohibited. Industrial hemp plants and seeds may not be transported across State lines.While this provides some latitude to make certain sales of “industrial hemp products” for purposes of marketing research, it is explicitly clear that general commercialization in all 50 states is NOT permitted and the commercialization of industrial hemp products not in connection with market research is prohibited.  Further, it is also clear that the sale of plants or seeds across state lines if forbidden.
  • Section 7606 specifically authorized certain entities to “grow or cultivate” industrial hemp but did not eliminate the requirement under the Controlled Substances Import and Export Act that the importation of viable cannabis seeds must be carried out by persons registered with the DEA to do so. In addition, any USDA phytosanitary requirements that normally would apply to the importation of plant material will apply to the importation of industrial hemp seed.This should not be a surprise.  The CSA continues to control and germinated seeds are prohibited from being imported unless registered with the DEA to do so.
  • The Federal Government does not construe section 7606 to alter the requirements of the Controlled Substances Act (CSA) that apply to the manufacture, distribution, and dispensing of drug products containing controlled substances. Manufacturers, distributors, dispensers of drug products derived from cannabis plants, as well as those conducting research with such drug products, must continue to adhere to the CSA requirements.This appears to be directed at the extraction market for CBD and other cannabidiols.

As many in the marijuana and hemp industry are aware, the Food and Drug Administration (FDA) has recently turned its focus on cannabidiol (CBD). In 2015 alone, the FDA has sent 7 warning letters to companies that are currently marketing CBD in various forms as a dietary supplement. While some in the hemp CBD market claim that the FDA’s letters only apply to CBD derived from marijuana, this is simply not the case as set forth in the FDA Q&A question number 12. Many of these warning letters were sent to sellers of hemp oil products marketed as high CBD without regard for the CBD was derived from marijuana or hemp.

The FDA has also granted GW Pharma fast-track approval for studies of potential drugs that include CBD as a main active ingredient, and the studies are well underway. This classification significantly impacts to CBD industry as it effectively shuts the door on CBD being classified and marketed as a dietary supplement.

This is due to the fact that FDA rules prohibit a substance from being defined as a dietary supplement after investigations for that substance as a pharmaceutical have been authorized and initiated. The FDA has the power to regulate products claiming health benefits under the commerce clause of the United States Constitution, and indeed they have cited interstate commerce in their warning letters to CBD marketers.

While companies generally cannot specifically market their CBD products as having health benefits or as a dietary supplement, hemp products or hemp oils are still being marketed as containing CBD as an ingredient. Have these companies taken appropriate steps to comply with the FDA’s position regarding CBD?