There is a scene in The Hunt for Red October when Captain Marko Ramius, played wonderfully by the late, great Sean Connery, says of a pending nuclear standoff: “Once more, we play our dangerous game, a game of chess against our old adversary – The American Navy.” We were reminded of that scene this week when the U.S. Food and Drug Administration (FDA) issued warning letters to companies selling over-the-counter (OTC) drugs for pain relief that contained CBD. Yet another chapter in a cat-and-mouse affair between federal regulators and a segment of the hemp community that consistently tests the legal limits of this still-maturing industry. As in the movie, the stakes are substantial. Unlike Hollywood, the FDA does not consider this a game.

While the 2018 Farm Bill legalized the production of hemp at the federal level, hemp products intended for human or animal consumption are still subject to the Food, Drug, and Cosmetic Act (FDCA) and regulations promulgated by the FDA, as well as the Federal Trade Commission Act (FTCA) and regulations promulgated by the Federal Trade Commission (FTC). Products containing CBD – including edibles, tinctures, and oils – have been in the FDA and FTC’s regulatory crosshairs since April 2019, when those agencies issued warning letters to three companies marketing their CBD products as treatments and cures for a variety of diseases and illnesses. We discussed these letters in a previous blog post, where we summarized key federal laws that govern the labeling and advertising of CBD products and provided a list of marketing dos and don’ts for CBD companies. Perhaps the biggest “don’t” is this – don’t make claims that a CBD product “can prevent, treat, or cure” or a disease. Such marketing causes a product to be considered a “drug” under the FTCA, and a CBD product cannot be marketed as a drug absent FDA approval.

Since April 2019, some companies have continued to make improper health-based claims about their CBD products, and the FDA and FTC have issued dozens of similar warning letters based, in large part, on such improper claims, which we have discussed in previous blog posts (here and here). And the FDA shows no signs of slowing down.

On March 22, 2021, the FDA issued two warning letters (available here and here) to companies that the FDA alleged were “illegal[ly] marketing … unapproved drugs labeled as containing CBD.” These companies were marketing OTC pain relief drugs that listed CBD as an inactive ingredient. The FDA determined those listings were misnomers – “[a]lthough CBD is listed as an inactive ingredient … the product labeling clearly represents CBD as an active ingredient, which is a component of a drug intended to furnish pharmacological activity or other direct effects in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or function of the body[.]” The FDA further noted that CBD cannot be listed as an “inactive” ingredient for several reasons, including that it “has known pharmacological activity with demonstrated risks.”

There are a few important takeaways from the FDA’s latest action:

• If anyone was hoping the FDA would simply stop enforcing federal hemp policy with the advent of the Biden administration, that hope should be dashed. Although President Joe Biden has yet to name a permanent FDA commissioner – Dr. Janet Woodcock has been serving as acting commissioner since Jan. 20 – this newest development is a clear indication that the agency does not intend to stop policing the industry, and CBD companies in particular.
• The cat-and-mouse game continues. First, CBD companies marketed products by making health claims about CBD’s benefits. The FDA and FTC stepped in. Now, CBD companies are marketing products by making health claims but listing CBD as an inactive ingredient (wink). FDA is again stepping in. Look for this pattern to repeat itself, as some CBD companies test the limits of the FDA’s regulations and, perhaps more importantly, enforcement capabilities.
• The warning letters also detailed the robust FDA inspections prompted by these companies’ improper health claims and marketing and the laundry list of violations the FDA discovered in those inspections, including the companies’ failure to comply with Current Good Manufacturing Processes. This portion of the letters serves as an important reminder that improper health-based claims appear to be the FDA’s focus, but they often serve as the tip of the spear. Just because the FDA initially homes in on a company’s health-based claims does not mean the scope of the FDA’s investigation will be limited to those claims.