The FDA’s recent decision not to regulate CBD like a food or dietary supplement leaves a multi-billion-dollar industry in a lurch. What’s next, and what should companies do now?
After four years of considering the issue, the US Food and Drug Administration (FDA) issued a press release on January 26, 2023 that it would not regulate cannabidiol (CBD) as a food and dietary supplement. According to the agency, the use of CBD, particularly over the long term, presents too many uncertainties and potential safety risks to be effectively regulated under existing regulatory frameworks. So, says the agency, Congress will have to get involved to establish a “new regulatory pathway” necessary for CBD.
The announcement is a surprising setback for CBD producers operating in a complicated legal environment. In 2018, the Agriculture Improvement Act of 2018 (commonly known as the 2018 Farm Bill) removed hemp from the definition of marijuana under the Controlled Substances Act, thus clearing the way for legal commercial production of CBD. Yet the legislation also preserved the FDA’s authority over hemp-derived food, drug, dietary, and cosmetic products, which the FDA promptly exercised. Since 2018, the FDA has repeatedly stated its position that CBD is unapproved food additive and dietary supplement under the Food, Drug, and Cosmetic Act (FD&C Act) because CBD is used as an active ingredient in an FDA-approved drug (Epidiolex). Over the years, FDA has issued numerous warning letters to CBD companies making unsubstantiated health claims and products that would appeal to children. On top of this, FDA recently expanded its enforcement activities to companies selling CBD-infused foods and beverages, even to companies operating in states in which CBD-infused food products are legal.
Meanwhile, several states have legalized sale of CBD-infused foods or supplements (directly irrespective of the FDA’s position), and the CBD market has boomed into a multi-billion-dollar domestic industry that is only expected to grow. The complex and conflicting regulatory environment, coupled with seemingly insatiable consumer demand, has led to a largely unregulated market subject to unpredictable, whack-a-mole-style enforcement.
Many industry participants are frustrated. The FDA’s decision not to issue any form of regulation or guidance after four long years of evaluation, but to continue (and enhance) its enforcement posture significantly increases legal risk for companies in this space. So what’s next?
Several legislators have expressed their intent to address the issue through the legislative process, but the fact that the matter is now in Congress’s hands provides little comfort. Shortly before the FDA’s recent announcement, Rep James Comer R-KY announced his intention to investigate the FDA’s failure to act on CBD regulations. Several other legislators also sent letters to the FDA prior to the FDA’s decision seeking details on how the FDA was working to address regulatory uncertainty. Shortly after the FDA announcement, Sen Wyden (D.-Ore.) issued a statement that, in response to the FDA’s request for Congressional action, he will reintroduce his Hemp Access and Consumer Safety Act. The Hemp Access and Consumer Safety Act along with another bipartisan CBD reform bill, the CBD Product Safety and Standardization Act, was introduced in 2021, but both bills failed to make it out of committee, underscoring industry fears that a dysfunctional Congress is not likely to provide speedy relief to the market.
So what can industry participants do now to minimize risk? Stakeholders should keep a close eye on the legislative process and consider lobbying efforts where appropriate. Manufacturers and retailers of CBD products must remain steadfast in their compliance efforts in spite of ongoing uncertainty. Even though the FDA has punted on its rulemaking, we expect to continue to see enforcement actions against those with products that arguably violate the FD&C Act. Companies marketing CBD products should ensure that they do not make any unsubstantiated health claims on packaging, websites, or other marketing materials, which have been a focus of the FDA’s enforcement efforts. CBD should not be marketed as a dietary supplement. Packaging of CBD products should clearly identify CBD as an ingredient and the source of the CBD. Manufacturers and marketers should also take steps to ensure that the packaging and products do not appeal to children. Those producing CBD infused beverages and foods might even reconsider their product lines in light of the risks associated with such CBD infused foods and beverages.
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