4 Things You Should Know Before Marketing CBD Products

From use in oils to hamburgers, CBD is abuzz with popularity. Despite the trend, there are many questions around the legality of selling and consuming CBD. For companies looking to cash-in on the craze, navigating the laws and regulations is critical —this is no easy task considering the laws are confusing and unclear.

What is CBD?

CBD, or cannabidiol, is found in both the marijuana and hemp plants. The qualifier here: hemp contains less than 0.3 percent THC which does not result in any psychoactive (“high”) effects, while the THC in marijuana is far more concentrated and known for its psychoactive properties. Many products, while marketed as CBD, are probably better defined as hemp extract which contain the CBD compound in addition to dozens of other compounds naturally derived from the hemp plant. This is an important distinction because products that are pure CBD (e.g. Epidiolex) are regulated as drugs by the FDA, and therefore are obtainable only through a doctor’s prescription.

For the sake of this article we will focus on the different types of hemp plant-based products marketed and sold as CBD dietary supplements in the US.

Is CBD legal in the United States?

The answer: yes and no. Technically, hemp dietary supplements which contain CBD are legal, as long as CBD is not listed as an active ingredient on the product’s label. Of course, the legality of hemp supplements depend on where you are in the United States.

Congress’ passing of the 2018 Farm bill changed the regulations around CBD by declassifying hemp as a Schedule I drug, creating a space where hemp is now federally recognized as an agricultural commodity and allowing the interstate sale of hemp. As CBD is a compound found in hemp, this indicates that the sale of CBD – on a federal level – is legal.

However, federal law often contradicts state law. In states like Nebraska, CBD is still considered to be akin to marijuana, and in Idaho a substance with even the smallest amount of THC is illegal (even if it’s hemp and not marijuana). This is why the news media is littered with stories about consumers and sellers alike being arrested for carrying and selling CBD products derived from hemp.

With contradictory laws, the Farm Bill isn’t the solution that many hemp-based dietary supplement companies were hoping it would be. Companies selling CBD-containing products must abide by both the federal and state laws to avoid risk.

Is it safe to market CBD products?

While the Farm Bill made the growth and sale of hemp legal for interstate commerce, the bill also maintained the FDA’s role in regulating products derived from hemp. The FDA itself has admitted to confusion over the regulations and has recognized the importance of clarifying its stance – meaning the regulations may be in flux. An upcoming hearing on the matter is scheduled for May 31, 2019.

In the meantime, the safest bet would be to focus claims and marketing on the whole hemp plant rather than on the CBD molecule component. But again, without clear guidance from the FDA on this topic, it’s hard to say with confidence what is a secure outlet.

What are the consequences if I don’t follow the regulations?

Despite confusion over the regulations, the FDA has a watchful eye on the industry. As the agency continues to refine its stance, enforcement has been focused on products believed to put consumers at risk through unsubstantiated or misleading therapeutic claims. For example, making a claim that CBD (a dietary supplement) “has stopped cancer cells in multiple cervical cancer varieties,” is an actual claim made by a CBD focused brand that qualifies for FDA intervention. For context, the only products allowed to make therapeutic claims are products classified as drugs.

The FDA isn’t solely focused on the claims made on product packaging, though. This is where companies need to tread carefully. Claims often made on a company’s website, through testimonials, or even on social media posts, while difficult to control, are the company’s responsibility. If trying to stay under the FDA’s radar, these channels need to be closely monitored.

The risk of being found in violation of federal regulations? A personalized warning letter from the FDA followed by, if not appropriately recertified by the Company, repercussions including potential  “…legal action without further notice including, without limitation, seizure and injunction” (via 2018 warning letter to Signature Formulations LLC).

Path forward: continued conversation on the regulation of CBD products

The FDA is hosting a public hearing on Friday May 31^st to seek out “…scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.” This will help the FDA determine whether an alternate approach to regulating and marketing hemp products is required, and hopefully add clarity to the ambiguity in the market.

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