Conflicting CBD Activity Calls for Increased Compliance and Business Planning
Lanton Law gave a December 2019 webinar with the American College of Apothecaries ACA on CBD. Since then we have seen two significant developments.
The first was with the U.S. Food and Drug Administration (FDA) itself. In November 2019, the industry saw the agency’s announcement of 15 warning letters it sent to companies for illegally selling products containing CBD in “ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act).
The FDA shortly afterwards issued a revised Consumer Update detailing safety concerns about CBD products more broadly. In the document titled “What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD,” FDA indicated that “Based on the lack of scientific information..., it cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.”
With the industry already facing several compliance questions, this new information from FDA has definitely made this issue even more confusing.
States on the other hand have been pressing forward with making their own policies. In New York, Governor Cuomo signed (S.6184/A.7680) which establishes a regulatory framework for the production and sale of hemp and hemp extract in New York State.
According to the Governor’s press release “The measure also requires the hemp industry to test and label their products, protecting consumers from potential harm. The legislation was signed pursuant to a chapter agreement, which provided for a more streamlined regulatory pathway for hemp products, granted the Department of Agriculture and Markets supervision over hemp growers and the Department of Health supervision over hemp extract; created a registration requirement for sellers of hemp extract products; made conforming regulatory changes to the 2018 Farm Bill; and defers decision making on hemp extracts, including CBD, as additives for food and beverages.”
The state will host a hemp summit in January to continue policy discussions on this issue.
With the collective market for CBD sales expected to exceed $20 billion in the United States by 2024, according to BDS Analytics and Arcview Market Research, there are many stakeholders who would benefit from clarity in this area. If you are either thinking about or are currently selling CBD and are unsure how your business model fares, contact Lanton Law so that we can go over your business model, assess potential risks and help you plan for both pending legislative and regulatory actions.