Before getting into this business we looked into the legal status of CBD and found that there is a lot of confusion around this question. This is what we've learned...
Yes! The 2018 Farm Bill set a statute that legalized the hemp plant (Cannabis sativa) as long as it contained no more than 0.3% of THC. Now, all parts of the hemp plant are federally legal to grow and utilize for commerce.
At the state level, federal law supersedes state law per the constitution. From a regulations perspective, these products are regulated as supplements .
Just prior the 2018 Farm Bill:
We had to spend quite some time trying to figure this out ourselves given the complexity of the question. First it is important to make the distinction between CBD derived from Hemp VS Marijuana. Under federal law, “hemp” is defined as Cannabis sativa plants with less than 0.3 percent THC. Anything with more is “marijuana.” The 2014 Farm Bill effectively made cultivation of hemp legal, but the DEA's scheduling of the plant created ambiguity. There have been further rulings, for example, a Ninth Circuit Court ruled that the DEA could not list hemp-based products under the Controlled Substances Act, thus upholding the 2014 Farm Bill legislation. The 2018 Farm Bill will officially remove Hemp from the Controlled Substances Act and eliminate any legal ambiguity.
Hemp-derived CBD is no longer a controlled substance under federal law.
As a consequence of the 2018 Farm Bill, hemp is now permanently removed from the Controlled Substances Act (CSA). It is now deemed an agricultural commodity, no longer able to be classified as a controlled substance, like marijuana.
Furthermore, by redefining hemp to include its “extracts, cannabinoids and derivatives,” Congress explicitly removed popular hemp products – such as hemp-derived CBD -- from the purview of the CSA. Accordingly, the Drug Enforcement Administration (DEA) no longer has any claim to interfere with the interstate commerce of hemp products, so as long as the THC level is at or below 0.3%. This should give comfort to federally regulated institutions – pharmacies, banks, merchant services, credit card companies, e-commerce sites and advertising platforms -- to conduct commerce with the hemp and hemp CBD industry.
State and Tribal governments may impose separate restrictions or requirements on hemp growth and the sale of hemp products – however, they cannot interfere with the interstate transport of hemp or hemp products.
The FDA’s position on CBD is unsettled and unsupported by law.
While the DEA is now officially out of the hemp regulation business, the U.S. Food and Drug Administration (FDA) retains its authority to regulate ingestible and topical products, including those that contain hemp and hemp extracts such as CBD. Much public attention has focused on a non-binding Q&A posted on the FDA web site starting about three years ago -- reiterated in a December 20, 2018 statement by the FDA Commissioner -- which suggests that CBD products cannot be marketed as foods or dietary supplements.
This position, however, is unsettled and rests on questionable legal grounds. More importantly, the agency’s current position is not a final determination and should not be interpreted as the law.
As background, the Food, Drug & Cosmetics Act, as amended by the Dietary Supplement Health and Education Act of 1994 (DSHEA),3 defines a “dietary supplement” as a product intended to supplement the diet that contains one or more of the following: (a) a vitamin; (b) a mineral; (c) an herb or other botanical; (d) an amino acid; (e) a dietary substance for use by man to supplement the diet by increasing the total dietary intake; or (f) a concentrate, metabolite, constituent, extract, or combination of any ingredient described in clause (a) through (e).
Thus, the law permits a wide range of dietary ingredients in dietary supplements, including CBD which is an extract of a botanical (Cannabis sativa L. plant). CBD also falls under clause (e) as it is a dietary substance for use by man to supplement the diet by increasing the total dietary intake.
The FDA has taken the position – via Warning Letters sent to hemp-CBD companies, as well as the FDA Q&A posting – that because a product containing CBD was approved as a drug and substantial clinical trials studying CBD as a new drug were made public prior to the marketing of any food or dietary supplements containing CBD, dietary supplements or food are therefore precluded from containing this ingredient ( referred to as the “IND Preclusion”).
However, we firmly disagree that the referenced clinical trials are in fact “substantial,” asthe trials were extremely limited in scope, and funding and the publication of these trials were limited. The FDA also seems to misinterpret the IND Preclusion in that it believes the preclusion date is simply the date in which it authorized CBD as an IND, without giving deference to the remaining portion of the statute, which requires that substantial clinical investigation be commenced and that such substantial clinical investigation be made public. In addition, the FDA Q&A document does not have the effect of law but instead reflects FDA’s opinion, which the agency suggests may change as evidenced from the FDA’s own request for further input on the topic.
Rather, we believe that hemp-CBD products were marketed as dietary supplements and/or foods prior to any substantial drug investigations being undertaken, or made public, and that based on the definition of “dietary supplement” under DSHEA, CBD is in fact a permissible dietary ingredient. Moreover, Warning Letters and agency Q&A documents are by no means final agency determinations.
It is of significant import that, to date, the FDA has not prohibited the sale of hemp-derived CBD products or ordered a product recall. Further, the primary motivation for the Warning Letters issued in 2015, 2016, and 2017 concerned the improper use of disease-remediation claims by supplement/food companies. No Warning Letter has been issued to a company that merely sold legitimate hemp-derived CBD products without making inappropriate disease-remediation claims.