FDA and AHPA Convey Similar Message to Cannabis and CBD Industry

The “wild west” days of manufacturing and selling cannabis products outside the sphere of regulatory influence are rapidly coming to an end. This has been signaled in a number of ways this summer, most notably in a speech given this week by Lowell Schiller, the FDA’s Principal Associate Commissioner for Policy, and in a guidance document released in July (Memo) by the American Herbal Products Association (AHPA). Although different in many respects, both the FDA speech and the AHPA Memo focus on the same point, namely, that consumer cannabis products, including cannabidiol (CBD), are subject to the same regulations as other plant-based consumer products. Of course, this has always been the case, at least theoretically. However, it has not been until recently, and in particular with passage of the Agricultural Improvement Act of 2018 (2018 Farm Bill) in December of last year, that regulators began taking a sincere and sustained look at the cannabis industry.

The cannabis industry is rapidly maturing. With this maturity comes significant responsibility. In this article I will discuss the points addressed in the FDA speech and the AHPA memo. I strongly encourage you to read them. (Hyperlinks to both are provided above.)

i. FDA Speech

In most respects, the FDA speech was much ado about nothing. To use the infamous words of the country’s First Child, it was a “nothing burger”. Commission Schiller announced no new regulations or enforcement priorities on cannabis products, provided no concrete timelines for receiving FDA guidance on CBD, offered no insight into the FDA’s “CBD Policy Working Group”, and did not expand on the FDA’s position on the use of CBD in consumer products.

That being said, the speech is worth reading for its clear and coherent summary of the FDA’s current view on cannabis and, in particular, CBD. I’ve found that, while most people in the industry understand that the FDA has a position on CBD, very few understand exactly what that view is and why the FDA holds it. (For more insight into FDA regulation of CBD, I recommend reading this article, this article, this article, and this article.)

Most important, the FDA speech strongly reiterates two points. First, the FDA will continue to enforce its prohibition on selling unapproved CBD products that make drug claims. Although the FDA has not taken much, if any, action regarding the use of CBD in consumer products, it has consistently enforced its prohibition on making therapeutic claims about CBD products. As I discussed in this article, the FDA recently sent warning letters to several CBD product manufacturers, including Curaleaf, for making drug claims. The FDA has sent dozens of these letters to CBD manufacturers and brands over the past three years for making therapeutic claims. It shows no sign of slowing down or modifying its enforcement effort on this front. If anything, I expect its enforcement on drug claims to escalate.

Second, and perhaps most important, Commissioner Schiller clearly stated that cannabis products, including CBD, will be treated the same as any others:

“So where does hemp fit into all of this? On a certain level, the answer is very straightforward: We treat cannabis and cannabis derivatives – regardless of whether they are classified as marijuana or hemp – the same as we do any other substance.”

 ii. AHPA Memo

If the FDA speech was a “fair warning” shot to producers of cannabis products that the FDA is now looking at them, the AHPA Memo was a “wake up call” from an experienced older sibling that producers of cannabis products sold in California are subject to stringent notice requirements regarding the presence of certain toxins in their products. Failure to comply with them could result in ruinous fines.

The AHPA Memo reads much differently than the FDA speech. It is more technical and contains charts and explanations of various testing protocols. However, its message is the same: cannabis products, at least the ones sold in California, will be treated as any other plant based consumer product and subject to the same regulations. In this case, the regulations at issue are the ones set forth in California Proposition 65 that a producer must provide specific types of warnings on product labels regarding the presence of certain toxic substances, including heavy metals, pesticides, and β-myrcene, a common cannabis terpene.

It would be a tedious and unproductive exercise for me to regurgitate the well written points in the AHPA Memo. I strongly encourage you to read it. Instead, I would like to draw attention to two important points that it makes. First, all cannabis products, including CBD, sold in California must properly test for the presence of certain toxic substances and provide specific warnings to consumers if they contain them. Second, failure to abide by these regulations can not only subject a producer to governmental action by California district attorneys, but also to private civil lawsuits brought by consumers. Fines for violations are steep and mount swiftly. They could easily overwhelm a company, even one with relatively deep financial pockets. California has always been known for its progressive (some would say onerous) consumer protection regulations; however, it is not only the largest market in the US, but its regulatory framework often trickles down to other states. For these reasons, it is difficult to imagine why a cannabis/ CBD company would not voluntarily adhere to Prop 65 labeling standards now, regardless of where it is located.

iii. Is Your Company Compliant?

Regardless of the messenger, the message is clear: cannabis companies, including hemp and CBD companies, are being brought into the regulatory fold. They are subject to the same requirements as other non-cannabis plant-based consumer product companies. This should not be a surprise to anyone. However, it may be. To paraphrase Commissioner Schiller, many participants in the cannabis industry do not have much, if any, experience dealing with FDA or other regulatory authorities. As the old saying goes, ignorance of the law is no defense. If you haven’t already done so, it is time to do a comprehensive overview of your company’s compliance with federal and state regulations. We are happy to assist you in that process.

August 16, 2019

Rod Kight is a cannabis attorney. He advises businesses on cannabis and CBD law. Rod speaks at cannabis and CBD conferences across the country, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. You can contact him here.