You can’t miss them: signs reading “CBD PRODUCTS SOLD HERE” are appearing at gas stations and pharmacies across the country. Cannabidiol (“CBD”), a natural, non-psychoactive compound derived from the cannabis plant, is a common product marketed as a supplement that provides health benefits to its users. Proponents claim that CBD relieves pain and reduces feelings of anxiety and depression, among other health benefits. In 2018, the United States Food and Drug Administration (“FDA”) approved Epidiolex, an oral solution of CBD, for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome, diseases that commonly appear in early childhood.

While the effects of CBD are promising, the FDA considers CBD a “new drug” under the Food, Drug and Cosmetic Act (“FD&C”). Under the FD&C, it is generally illegal to bring a new drug into interstate commerce. So the question arises: if the FDA considers the sale of CBD to be illegal, why do we see CBD for sale everywhere?

In 2018, the Agriculture Improvement Act (“2018 Farm Bill”) removed hemp from the definition of marijuana under the Federal Controlled Substances Act (“CSA”). In accordance with the Farm Bill of 2018, Pennsylvania adopted a hemp program. The program allows the Pennsylvania Department of Agriculture to grant licenses to entities to grow, cultivate and sell hemp. Under the program, license holders are allowed to grow hemp for the purpose of producing CBD. Other states have adopted similar programs, and under legal state programs, the industrial hemp industry is growing (pun intended). By 2024, the U.S. CBD market is expected to reach $ 20 billion in sales. By 2028, the global industrial hemp market is expected to reach $ 27.7 billion.

So what’s the problem? Since 2015, the FDA has sent warning letters to more than a dozen CBD companies for alleged FD&C violations. In the warning letters, the FDA says it has scanned company websites (including social media accounts) for evidence of FD&C violations. The FDA explains that marketed CBD products are “drugs” under the FD&C because the products are “items intended for use in the diagnosis, cure, alleviation, treatment or prevention of disease and / or intended to affect the structure or any function. of the body. “21 USC § 321 (g) (1). The FDA claims the products are” new drugs “because CBD is not generally recognized as safe and effective. See 21 USC § 321 (p). Under the FD&C, new drugs cannot be legally introduced or delivered for introduction into interstate commerce without prior FDA approval, or unless they are over-the-counter drugs legally marketed under 21 USC § 505G.

Obviously, there is a conflict between state and federal authorities. While companies are exposed to FD&C, states like Pennsylvania allow the production of CBD. In the absence of regulation and consistent enforcement, it is likely that the CBD industry will continue to grow. Due to the complexity of the laws, companies operating in the CBD industry may encounter difficulties in risk management, banking and logistics. SMGG follows changes in CBD laws and the rule-making process, and we’re ready to advise you or your business as you navigate the complex CBD legal landscape.

© 2021 Strassburger McKenna Gutnick and GefskyNational Law Review, Volume XI, Number 148


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