Adding Cannabidiol to the Menu
By Brian P. Sylvester, Esq.
Projected to near $22 billion in market revenue by 2022—up from an estimated $500 million in 2018—the hemp-derived cannabidiol (CBD) market presents a substantial growth opportunity for food, beverage, and dietary supplement companies. Already, CBD has exploded into mainstream wellness products—from oils and dietary supplements to various foods and infused beverages. Even household brands like Coca-Cola are exploring the possibility of rolling out CBD-infused functional wellness drinks.
The 2018 Farm Bill’s legalization of hemp has catapulted CBD, a key hemp derivative, into the regulatory spotlight. Now that hemp is legal, a key question is whether and to what extent CBD may be added to food, beverage and dietary supplement products for distribution nationwide. Misconceptions abound with some incorrectly believing that the enactment of the 2018 Farm Bill permits the unrestricted use of hemp and its derivatives.
States primed to cash in on hemp production are urging federal regulators to provide clarity. For example, U.S. senators Ron Wyden (D-OR) and Jeff Merkely (D-OR) recently called for updated federal regulations in a January 15, 2019 letter to Commissioner Scott Gottlieb of the U.S. Food and Drug Administration (FDA). The senators contend that the current “regulations limit producers from taking full advantage of the industrial hemp market by, for example, prohibiting food products containing CBD from being sold across state lines.”
Forging an efficient and predictable regulatory pathway will be essential to commercializing CBD-infused foods, beverages, and dietary supplements for nationwide distribution. This article addresses the current regulatory state of affairs for hemp-derived CBD and looks ahead to a recently announced public meeting that could take us one step closer to adding CBD-infused products to the menu across the U.S.
What is CBD?
CBD or cannabidiol is a nonpsychoactive chemical compound. CBD may be derived from hemp or marijuana. Hemp and marijuana themselves are distinct species of Cannabis, a genus of plants with two primary species—indica and sativa. Hemp and marijuana both derive from the C. sativa family. Hemp and marijuana therefore share certain similarities. Importantly, however, there are key biological differences. For example, whereas hemp contains just 0.3 percent or less of tetrahydrocannabinol (THC), a psychoactive chemical compound, marijuana contains THC concentrations between 15–40 percent.
The distinction between hemp and marijuana is critical because the Agriculture Improvement Act of 2018 (i.e., the 2018 Farm Bill) legalizes hemp and tasks the U.S. Department of Agriculture (USDA) with the responsibility to develop federal regulations to monitor hemp cultivation and production (though no timeline has been set). Marijuana continues to be classified as a Schedule I drug pursuant to the Controlled Substances Act.
Whereas USDA is set to oversee hemp cultivation and production, FDA exercises oversight regarding the use of hemp and its derivatives (like CBD) in foods, beverages, and dietary supplements.
Current FDA Regulation and Enforcement of CBD
Current federal law prohibits the addition of CBD to foods and dietary supplements regardless of whether the CBD is derived from hemp or marijuana. More specifically, FDA interprets the Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Dietary Supplement Health and Education Act of 1994 (DSHEA), respectively, to prohibit the interstate marketing of food and dietary supplements containing added CBD. Subject to limited exceptions, neither food nor dietary supplements are permitted to contain an investigational or approved drug as a component. CBD was approved as a drug in 2018.
DSHEA defines “dietary supplement” to exclude products that contain an FDA-approved drug or a substance that has been “authorized for investigation as a new drug” [see §3(a)(ff)(3)(B)(ii)]. Likewise, the FD&C Act generally prohibits the sale of any food to which an approved or investigational drug has been added.
Notable statutory carve-outs include: (1) evidence that the substance of interest has been marketed in a dietary supplement or a conventional food prior to new drug approval or investigation and (2) the issuance of a new rule approving the use of the substance in food or dietary supplements. To date, no evidence has been presented to FDA indicating that CBD was used in food or dietary supplements prior to CBD’s drug approval or investigation. But the jury is out on whether FDA will ultimately issue a rule authorizing the use of hemp-derived CBD in food or dietary supplements. FDA stakeholder engagement anticipated for 2019 may push FDA down the road of regulation that will open up a whole new world of CBD-infused foods, beverages, and dietary supplements. In the meantime, it continues to be unlawful under federal law to add CBD to food or dietary supplements. But what is your regulatory risk if you currently market CBD-infused foods and dietary supplements?
To date, FDA regulatory activity in the CBD sphere has focused on unsubstantiated disease claims. In 2017, for example, FDA issued warning letters to four companies—Greenroads Health, Natural Alchemist, That’s Natural! Marketing and Consulting, and Stanley Brothers Social Enterprises LLC—citing unsubstantiated claims in connection with over 25 different dietary supplement products. These claims cited by the FDA ranged from “[CBD] has antipsychotic properties, which makes it very useful for treating bipolar disorder” to “Adding CBD oil as part of your daily Alzheimer’s medicine routine has a good chance at delaying the progression of the disease.”
Under the FD&C Act, a product becomes a “drug”—and hence subject to stringent oversight—if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or function of the body. Outside of unsubstantiated disease claims, FDA has not otherwise targeted CBD foods, beverages, and dietary supplements. It remains to be seen whether the enactment of the 2018 Farm Bill will have any bearing on FDA’s enforcement in this area.
FDA to Hold Public Meeting
In a December 20, 2018 statement, FDA Commissioner Scott Gottlieb indicated that FDA is gearing up to hold a public meeting (date to be determined) to gather stakeholder input relevant to the lawful pathways by which products containing Cannabis or Cannabis-derived compounds may be marketed in foods and dietary supplements, and how FDA might consider making these regulatory pathways “more predictable and efficient.” No agenda has been announced as of this writing. But several key questions for discussion as it pertains to CBD might include:
• What aspects of existing regulatory pathways can be leveraged to facilitate an efficient and predictable FDA review of CBD-infused foods and dietary supplements?
• Given the current approval of CBD as a drug and the absence of an applicable exemption for its use in foods or dietary supplements, will enforcement discretion and industry guidance alone be sufficient to overcome this hurdle? If not, what should a rulemaking include? Should Congress step in?
• Biotech companies are also looking to enter this market. Should CBD produced from genetically modified microbes (outside of the plant) be subject to a distinct premarket review process from plant-derived CBD? Would the regulatory status of CBD be the same or different if the regulatory sequences used to modify the microbes stem from pathways similar to those of hemp as opposed to marijuana?
• From an enforcement perspective, how will the FDA and the U.S. Drug and Enforcement Administration (DEA) interpret their statutory mandates? Since CBD can also be derived from marijuana, a schedule I drug subject to DEA oversight, will FDA and DEA exercise joint oversight to confirm the source of CBD in food and dietary supplement products?
FDA is poised to take action that could lead to the commercialization of CBD-infused foods and dietary supplements. In December 2018, FDA gave the nod to hulled hemp seeds, hemp seed protein, and hemp seed oil for use in food. More specifically, on December 20, 2018, FDA announced that it completed its evaluation of three Generally Recognized as Safe (GRAS) notices related to hulled hemp seeds, hemp seed protein, and hemp seed oil and that the agency had no questions regarding the company’s conclusion that the use of such products as described in the notices is safe. In responding to the GRAS notices, FDA noted that the hemp seed-derived ingredients contain only trace amounts of THC and CBD, which the seeds may pick up during harvesting and processing when in contact with other parts of the plant. FDA wrote, “consumption of these hemp seed-derived ingredients is not capable of making consumers ‘high’.”
CBD is understood to be nonpsychoactive. So to the extent that companies can demonstrate to FDA that CBD does not pose any human health risks when used as intended and is otherwise compliant with the FD&C Act and DSHEA, and the laws are updated to accommodate hemp-derived CBD in foods and dietary supplements, CBD-infused products could very well hit the marketplace—nationwide—sooner rather than later. Further, while FDA has already taken a position on CBD as a drug, other cannabinoid derivatives with similar safety profiles which are not the subject of drug approvals may present a lower regulatory hurdle for commercialization, providing claims are carefully structured to avoid classification as a drug.
It is quite conceivable that FDA will choose to undertake rulemaking to authorize the use of CBD in foods and dietary supplements. As an interim action—to facilitate the immediate commercialization of CBD-added products nationwide—FDA could choose to issue a formal policy statement indicating that it will not enforce the prohibition on foods and dietary supplements containing CBD.
Biotech companies are also looking to enter this market by using microbes to synthetically create CBD. Poised to scale up, biotech CBD production interests will need to be represented in updated federal policy and/or regulations concerning the use of CBD in foods and dietary supplements. For example, a targeted exemption could be designed to address plant and nonplant CBD-sources and specify the allowable uses of hemp derived-CBD outside of the prescription drug zone.
Rising consumer appetite for CBD-infused foods and dietary supplements coupled with the recent legalization of hemp in the U.S. has set the stage for high expectations.
Brian P. Sylvester, Esq., special counsel with Wiley Rein LLP, provides emerging and established companies in the food, beverage and agricultural biotechnology sectors with practical solutions to complex regulatory challenges. He draws on his combined public-and private-sector industry experience, including his former role as a regulatory attorney with U.S. Department of Agriculture, to help clients achieve business objectives for a range of commodities regulated by the USDA and FDA.
1. The Farm Bill defines hemp as any part or derivative of the Cannabis sativa L. plant with a tetrahydrocannabibol level below 0.3 percent on a dry-weight basis.