FDA Regulation of CBD Opens Exploration

By Jason Mitchell

The cannabis plant has been cultivated for centuries. Our ancestors used its fibrous stalk called hemp for many products. Hemp is still used in the production of fabric, oil, paper, ink, paint, cosmetics, food and much more.

On December 20, 2018, the president signed into law the 2018 Farm Bill, which categorizes hemp as an agricultural crop and removes hemp from the Controlled Substance Act (“CSA”). The legislation defines “hemp” as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” It also removes the trace levels of THC found in the hemp from the CSA.

The 2018 Farm Bill therefore confirms that hemp and hemp-derived ingredients such as CBD that meet this definition are not controlled substances subject to Drug Enforcement Administration (“DEA”) jurisdiction. Thus, by clarifying that the entire hemp plant and all derivatives—including CBD specifically—are not under the CSA, the 2018 Farm Bill has led to further interest and growth of the hemp and CBD market.

CBD problematic health claims

CBD is a non-intoxicating ingredient found in the cannabis plant; it provides all of the benefits of marijuana, but without the high. The 2018 Farm Bill did not alter the FDA’s authority over hemp and CBD-containing products within its jurisdiction. FDA currently takes the position that CBD is NOT a legal food or dietary supplement ingredient due to provisions in the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) that restrict the use of substances that have been studied or approved as a new drug, referred to as the “IND Preclusion.” These provisions also permit the Secretary of Health and Human Services (through the FDA) to issue a regulation that would allow the use of an article that would otherwise be prohibited under the IND Preclusion.

The FDA has yet to issue such a regulation on CBD, which has created a space for companies to make unsubstantiated claims on the benefits of CBD. Although the FDA has clarified that it is not exercising enforcement discretion with respect to food and dietary supplements containing CBD. However, the agency has focused its enforcement activity primarily on dietary supplements making serious disease claims. Since 2015, the FDA issued numerous warning letters to firms marketing CBD-containing dietary supplements, cosmetics and pet products, with the majority issued to dietary supplement marketers. While these letters cite the FDA’s position regarding CBD as an impermissible ingredient, it is important to note that all of the products at issue in the warning letters included claims that they could cure, mitigate, treat, or prevent diseases such as cancer, Alzheimer’s disease and diabetes. This caused the products to be categorized as unapproved new drugs. Individual states have set rules in place to govern CBD; however, without proper FDA oversight, an unregulated CBD supplement and food market may be problematic to public health and safety.

CBD is everywhere

CBD products have been popping up everywhere: your local grocery store, gas station, pharmacy, coffee shop, bakery and makeup store. Under FDA rules, businesses are not able to market their products for medically defined diseases. Businesses are only allowed to make substantiated claims that are supported by scientific studies. Unethical businesses making unsubstantiated claims such as “CBD reduces anxiety or pain” are not acting in good faith. Rules governing supplements, food and beverages have been updated periodically since 1994; the lack of federal CBD regulations does not make it okay to make unsupported medical claims.

The FDA has set rules and regulations that companies must follow when they take a constituent of an herb (i.e., hemp) and add it to dietary supplements, foods or beverages. The Dietary Supplement Health and Education Act of 1994 (DSHEA) and the Food and Drug Cosmetic Act laid out the rules for developing and marketing these products. These were put in place to protect consumers from false, unsubstantiated claims, hazardous consumption and toxicity levels. Many companies selling CBD products entered the market, assuming the FDA’s rules governing supplements, food, and beverages did not apply to the CBD market. Regardless of what is in a supplement, food or beverage, the FDA rules apply. In the absence of specific rules implemented by the FDA federally, states have taken matters into their own hands by establishing rules such as registration requirements, QR codes and labeling requirements. States realize that the goal should not be to make CBD products illegal but to implement rules of engagement to properly manage this budding industry (pun intended). So they acted quickly in order to protect public health and interest.

Dosing challenges

The FDA is currently evaluating the safe and correct serving size of CBD and whether or not it should be classified as a drug or supplement. The FDA rules on dietary supplements state that no two products can be sold as both a supplement and drug, if the drug predated the supplement. GW Pharmaceuticals applied for an investigative drug filing in 2006 and was granted a New Drug Application for the development of Epidiolex, a CBD treatment for epilepsy. I believe the challenge with this rule is that hemp-derived CBD had been marketed prior to 2006. Taking away CBD and other cannabinoids from the market would be ill advised given the high demand for products. In response, the FDA has assembled a task force to address this issue.

The main concern for properly regulating CBD is human safety. For a substance to become “Generally Recognized As Safe” (GRAS) for food use, the company must either self-affirm its safety by performing all necessary safety studies, or submit a GRAS notification to the FDA for their evaluation and determination. The GRAS process involves examining the substance’s safety. The safety studies get peer-reviewed to see if the data collection and interpretation is accurate. The cost of conducting a GRAS evaluation especially with toxicity studies is very expensive and generally can take 12-18 months to complete. For dietary supplements, businesses must submit a “New Dietary Ingredient Notification” (NDIN) or be exempt from the NDIN process because their ingredient is GRAS and is in the food supply.

With 25 years of experience working in the dietary supplement industry, we project—based on our knowledge and experience—that the FDA will require CBD manufacturers to submit NDI notification and/or complete the GRAS process. At HempFusion, we worked together with our supplier to commence the necessary GRAS analysis and are nearing the completion of this process. Our initiatives to conduct a GRAS examination of our CBD containing raw material may not be necessary at this point, however, our experience in the industry leads us to believe that it may be mandated by the FDA sooner or later. Believing that human safety is of high importance to us as a company we made sure that GRAS process was the goal regardless of if this becomes a requirement or not. Our commitment to protecting public safety has driven us to produce honest products that do not mislead or make unsubstantiated claims.

Clearer regulations soon to come

At this point, the FDA’s regulations on CBD are non-existent, but from experience, we can expect that they will establish them soon. We expect the manufacturing of CBD will need to comply under the “Current Good Manufacturing Practice” (CGMP) and prove that the product is safe. The FDA may also establish serving size parameters to determine the allowed maximum amount of CBD in consumable products in order to differentiate supplements and drugs. The FDA has a responsibility to set regulations in place for a budding multi-billion dollar industry. We believe that the industry must also eliminate “bad actors.” All companies manufacturing and distributing CBD have a responsibility to follow the rules around claims, marketing, and substantiation. If the FDA does set new regulations for the CBD market, we expect there to be a grace period for companies to comply. We anticipate that the FDA will use the rules already in place that govern the supplement market and apply it to CBD. The projected enforcement of regulations will create investment opportunities for businesses who are looking to buy out their competitors. We may also see a percentage of bad actors pack up and close up shop. The major players within the industry will make sure they embark on compliance regulations for the longevity of their business.

The CBD industry is not slowing down; rather, the number of players are going to get smaller as the industry becomes better regulated. The FDA will soon be left with no choice but to establish clear regulations on the CBD industry as concerns over banking, merchant services and marketing avenues grow. CBD is projected to make one of the biggest impacts in the supplement industry for decades to come, but until we conduct proper scientific studies, we cannot make unsubstantiated claims. Misrepresentation of products and unproven benefits of CBD risks harm to public health and safety.

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Jason Mitchell N.D., co-founder and president, HempFusion, is a Naturopathic doctor board certified by the American Naturopathic Medical Certification Board. He has more than two decades experience working in the natural products industry. Jason is also a member of the American Naturopathic Medical Association and Certified Natural Health Professionals. He received his bachelor’s degree in supply chain management/operations from Arizona State University and his Doctorate in Naturopathic Medicine from Trinity College of Natural Health. Over the course of his career, Jason has successfully launched more than 300 new products, many of which have become retail top sellers.