The National Law Review

Will Hemp-Derived CBD Be Fully Legal with Passage of the 2018 Farm Bill

It is difficult to logically reconcile this “schizophrenic” state of the law.

In the meantime, it is ironic that removal of the DOJ and DEA’s authority over hemp-derived CBD will pave the way for the stepped-up jurisdiction and enforcement by the FDA, and a heightened risk of civil lawsuits as CBD enters the mainstream.

In June 2018,

the FDA approved the first CBD-based drug, Epidiolex, for treatment of childhood seizures associated with two rare forms of epilepsy. In its June 25 press release, the FDA states: “CBD is currently a Schedule I substance because it is a chemical component of the cannabis plant.” By definition, a Schedule I substance has no accepted medical use. To resolve this conflict, in September 2018 the DEA rescheduled Epidiolex to Schedule V, the least restrictive schedule under the CSA. That action by the DEA only applies to Epidiolex and not to CBD generally.

Whether CBD is classified as a controlled substance is based primarily on the part of the plant

from which the CBD is derived and whether it is derived from hemp as authorized by the Farm Bill

 

The 2018 Farm Bill

  1. It repeals section 7606 of the Agricultural Act within the 2014 Farm Bill, which mandated that hemp be grown under the auspices of a state agricultural pilot program or institution of higher education.
  2. It also removes industrial hemp from the CSA’s definition of “marijuana” and from Schedule I. 
The 2018 Farm Bill should end the debate over the legal status of the plant under the CSA. All products made from industrial hemp, including CBD oil, will be legal under the CSA if they contain no more than 0.3 percent THC. State agriculture departments and Native American tribes will be free to regulate hemp in the same manner that any other agricultural commodity is regulated. The 2018 Farm Bill also should end the debate on the extent to which private businesses are allowed to engage in the commercial sales of products derived from industrial hemp, and whether hemp-derived products may be sold through interstate commerce into states that do not have industrial hemp agricultural pilot programs. The Drug Enforcement Agency (DEA) has consistently taken the position that this commercial activity was impermissible under the 2014 Farm Bill. It is hard to see how the DEA will have a legal basis to make this argument given the language of the 2018 Farm Bill.

 

Marijuana versus Industrial Hemp

When considering the legality of CBD, one must ask two equally important questions:
Is CBD legal under the Controlled Substances Act (CSA)? Is CBD legal under U.S. food and drug laws?
After approval and reconciliation by the Senate and House, the final language within the 2018 Farm Bill will make drastic changes to the current laws concerning industrial hemp. It repeals section 7606 of the Agricultural Act within the 2014 Farm Bill, which mandated that hemp be grown under the auspices of a state agricultural pilot program or institution of higher education. It also removes industrial hemp from the CSA’s definition of “marijuana” and from Schedule, I. State agriculture departments and Native American tribes will be free to regulate hemp in the same manner that any other agricultural commodity is regulated.

The FDA and CBD

If CBD is derived from marijuana, it falls within Schedule I of the CSA, but if it is derived from properly sourced industrial hemp, it should fall outside the CSA.

CBD and State Regulations

We caution, however, that regardless of whether a state has taken a specific position on the issue, all states are obligated to refrain from enacting state food and drug laws that directly conflict with FDA regulations. California takes the position that CBD sourced from marijuana is permitted in food products but is considered a cannabis product that only may be sold by retailers properly licensed under state cannabis regulations. On the other hand, CBD sourced from industrial hemp is not permitted in any food product under any condition.

July 6, 2018

California Department of Public Health (CDPH) issued a public statement that CBD sourced from industrial hemp cannot be used in food in California.

Alabama: Guidance recently released by the state’s attorney general makes clear that “all CBD is illegal under Alabama law, except for the prescription drug Epidiolex.”

Alaska: In a September 2018 email, the state’s Department of Environmental Conservation wrote “there are no lawfully approved sources of CBD” available in Alaska. As a result, the substance cannot be sold or used in permitted food establishments.

Arizona: Arizona has a medical marijuana program, but state law enforcement has interpreted the law to exclude cannabis extracts, including CBD. There is a dispute heading to the state’s Supreme Court.

Colorado: Colorado’s House Bill 19-1295, which was signed into law in May 2018, modifies the Colorado Food and Drug Act to make explicit that food and drugs containing industrial hemp are not adulterated or misbranded under state law, under certain conditions.

Illinois: In late August 2018, Governor Rauner signed a bill legalizing industrial hemp. The bill legalizes the farming of industrial hemp for commercial, research or pilot programs. It also permits the use of industrial hemp in health food.

Indiana: Indiana recently has passed legislation permitting the distribution and retail sale of “low-THC hemp extract.”

Iowa: On August 17, 2018, the Iowa Department of Health issued a position statement on CBD, stating “it is the position of the Department that CBD products are not legal in the state of Iowa, with few exceptions.” One of the exceptions includes products produced and approved under Iowa’s Medical Cannabidiol Act that contain less than 3% THC.

Kansas: The Kansas legislature passed a bill in June 2018 that removed from the state’s controlled substances list any hemp products that do not contain THC. The industry has taken that to mean CBD oil is permitted so long as it contains zero THC.

Kentucky: The definition of marijuana under Kentucky state law exempts hemp-derived CBD products. 

Michigan: The possession, purchase or sale of marijuana or any marijuana product, including CBD, must be done in compliance with the Michigan Medical Marijuana Act and Medical Marijuana Facilities Licensing Act. Any possession or transfer of industrial hemp must be done in compliance with Michigan’s Industrial Hemp Research Act. The Act authorizes growing and cultivating of industrial hemp for research purposes only and does not authorize its sale or transfer. 

Minnesota: Though Minnesota has little to no regulation of industrial hemp−derived CBD, the Minnesota Board of Pharmacy warns that the industry is too liberally interpreting the law. In an October 2018 article, Executive Director Cody Wiberg said, “I’ve sometimes characterized this as the Wild, Wild West. This is a very rapidly developing industry. There is actually very little regulation of it. The sellers will say this is a dietary supplement, the FDA has actually said no.” Wiberg also said “we don’t think they’re legal right now,” and he has urged caution among consumers.

Missouri: In September 2018, the Missouri Department of Agriculture stated that “the legality of CBD oil is currently under review,” and that “we don’t want to make any premature legal interpretations because of the impacts the federal Farm Bill may have.”  

Montana: Under Montana’s Hemp Pilot Program, approved products include alcoholic beverages, including beer and distilled and infused spirits, and cannabinoid oils, including CBD for food, cosmetic and health products.

Nebraska: On November 16, 2018, the Nebraska Attorney General reminded sellers within the state that his office believes CBD is illegal. He has issued a memo to law enforcement stating that CBD remains illegal to possess, manufacture, distribute or dispense.

New York: New York has a robust industrial hemp pilot program regulated by the state’s Department of Agriculture and Markets. Although the department hasn’t explicitly permitted CBD-infused foods, it has a sample “CBD Research Partner Agreement” on its website that may be interpreted to imply that those licensed to grow industrial hemp can add CBD to food products.

Ohio: In August 2018, the Ohio Board of Pharmacy issued a FAQ stating that CBD oil derived from hemp has always been illegal, and that CBD is legal only when extracted and sold through the state’s medical marijuana program. The FAQ cites the DEA’s reasoning that cannabinoids such as CBD are found in trace amounts only on the exempt parts of the plant.

Tennessee: In 2014, Tennessee removed industrial hemp from the definition of marijuana in the state criminal code. In a February 2018 raid dubbed “Operation Candy Crush,” deputies from Rutherford County, Tennessee, closed approximately 25 retail stores and charged the owners for selling gummies made with CBD oil. All charges were later dropped, however, on the grounds that testing by the state could not distinguish if the oil came from marijuana or industrial hemp. After Candy Crush, state officials stated that the burden of proving CBD oil is not from hemp is on the state, not the accused.

Texas: Although Texas initially considered issuing draft guidance that would bar the sale of CBD-infused products, the state has refrained from issuing guidance while it reevaluates its position.

Washington: Washington allows licensed marijuana producers to use CBD from a source not licensed by the state’s Liquor and Cannabis Board, so long as the CBD product has a THC level of 0.3 percent or less on a dry weight basis and has been lab tested.

Wisconsin: In May 2018, the state issued a report concluding that the sale of CBD was illegal under state and federal law. The state Attorney General (AG) issued a statement that “law enforcement has encountered examples of products claiming to be CBD oil that resulted in people getting hurt and sick.” Shortly thereafter, however, the AG backtracked and confirmed that products made from industrial hemp are lawful, including hemp-derived CBD. The AG’s memo explains: “With the 2018 Farm Bill now working its way through Congress, it is likely that our current laws will be changed even further to make industrial hemp’s legality clear. Therefore, I am advising law enforcement not to take enforcement action against products made from industrial hemp that is grown under a lawful hemp research pilot program, including CBD, until Congress considers changes to the law, enabling the Wisconsin State Legislature to further clarify the status of these products.” Stores are currently permitted to sell CBD oil produced in compliance with state regulations.

 

 

Acronyms of importance

  • CBD = Cannabidiol

  • THC = tetrahydrocannabinol

  • DEA = Drug Enforcement Administration

  • CSA= Controlled Substance Act

  • FDA = Food and Drug Administration

  • FTCA = Federal Food, Drug, and Cosmetic Act

  • HFA = Hemp Farming Act

  • DSHEA = Dietary Supplement Health and Education Act

  • GRAS = Generally Recognized as Safe

Definitions

  • The CSA defines marijuana as “all parts of the plant Cannabis sativa L − and every compound, manufacture, salt, derivative, mixture or preparation of such plant, its seeds or resin.”
2014 Farm Bill
  • The Farm Bill’s definition of industrial hemp includes any part of the plant, including the flower. Unlike the CSA, the 2014 Farm Bill distinguished industrial hemp from marijuana based on the concentration of THC contained in each species. The currently accepted legal definition of industrial hemp is any part of the cannabis plant that has no more than 0.3 percent of THC on a dry weight basis.
Cannabis is therefore regulated by the federal government within three broad categories
  1. marijuana regulated under the CSA

  2. exempted parts of the cannabis plant under the CSA

  3. industrial hemp under the Farm Bills

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