ETA Expert Insights: Legislators Demand Clarity from FDA on CBD

By Loriann Ouimet, Qualpay; Jennifer Maddux, Intuit; Dan Frechtling, G2, members of the ETA Risk, Fraud and Security Committee.

It has been nearly a year since Congress removed hemp-derived CBD from the Controlled Substances Act – and yet regulatory uncertainty continues to cloud the industry. The primary hurdle involves the FDA, which currently prohibits CBD in food, beverages, dietary supplements, and ingestible animal products. Although the agency promised to explore potential pathways by which CBD food products could be legally marketed, it has yet to provide a regulatory framework or enforcement policy.

The FDA’s lack-of-clarity is not without consequences: CBD food and beverage companies have delayed product launches and the payments industry has hesitated to onboard CBD merchants. Meanwhile, unscrupulous sellers have flooded the market, putting consumers at risk.

Legislators Demand Clarity from FDA

Congress has clearly grown impatient with the FDA’s uncertain timeline. Senator McConnell recently introduced language in the Senate Agriculture Appropriations bill that would require the FDA to adopt a policy of “enforcement discretion” for CBD — meaning that the agency would not enforce against CBD supplements and foods except in specific, clearly-delineated circumstances. The bill, if passed, would give the FDA 120 days to develop such a policy. In addition, a bipartisan coalition of 26 members of Congress sent a letter to FDA (see Figure 1) supporting both enforcement discretion and an interim agency rulemaking that would allow lower-dose CBD in food and supplements. Finally, a group of senators demanded that the FDA submit: (1) an outline for a specific regulatory framework for CBD; and (2) a timeline for the publication of enforcement priorities.

As Congress pushes FDA for CBD rulemaking and clarity regarding enforcement, it seems likely FDA will provide an update on CBD relatively soon.

Figure 1: Letter from Congress to FDA

Background

To better understand the current situation, it is helpful to provide some background. Prior to December 2018, the DEA took the position that CBD was a constituent of marijuana – and therefore illegal under the Controlled Substances Act (CSA). With the passage of the 2018 Farm Bill, Congress removed hemp (and hemp-derived CBD) from the CSA. The Bill defined hemp as “any part of [the Cannabis sativa] plant, including […] all […] cannabinoids, […] with a [THC] concentration of not more than 0.3 percent on a dry weight basis.”

This legislative action thrust CBD into the mainstream. The US public responded enthusiastically. A Consumer Reports survey (see Figure 2) suggests that more than 25 percent of Americans have tried CBD in the past 24 months, and industry experts project a seven-fold market increase in 2019 alone. Some estimate that the US CBD industry could reach $16 billion by 2025.

Figure 2: Consumer Reports survey of US CBD users

FDA Asserts Its Authority

Of course, the 2018 Farm Bill did not solve all of CBD’s compliance problems. On the same day that the Farm Bill was signed into law, the FDA announced that – because CBD is an active ingredient in an FDA-approved drug – it is illegal to introduce into the US food supply. This means that ­– despite CBD’s popularity – it is clearly illegal in dietary supplements, food, and beverages. The FDA also stated that CBD animal products are unlawful.

Despite this strong stance, the FDA gave the industry reason for hope: The agency announced the establishment of an internal CBD working group, whose purpose is to “explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed.” It also held a public hearing on the topic of cannabis-derived products, which allowed stakeholders a chance to share their experiences and challenges with CBD. Moreover, the FDA clarified that CBD is a permitted cosmetic ingredient. To quote the FDA: “Certain cosmetic ingredients are prohibited or restricted by regulation, but currently that is not the case for any cannabis or cannabis-derived ingredients.”

Despite these initial positive steps, the FDA has not yet provided a substantive update on CBD. In mid-July, Dr. Amy Abernethy, the Principal Deputy Commissioner of Food and Drugs and head of the internal working group, tweeted that the working group planned to “report on its progress around end of summer/early fall.” To date, no report has been issued.

FDA Enforcement

The FDA’s enforcement policies are similarly unclear. The agency initially appeared to limit its enforcement to those CBD products that were marketed with “egregious and unfounded claims that are aimed at vulnerable populations,” such as claims CBD treats patients with incurable diseases. Between March and July 2019, the FDA issued four warning letters to CBD companies that marketed CBD with claims such as:

• “CBD successfully stopped cancer cells in multiple different cervical cancer varieties.”
• “CBD improves the symptoms of schizophrenia.”
• “CBD has demonstrated the ability to block spinal, peripheral and gastrointestinal mechanisms responsible for the pain associated with migraines, fibromyalgia, IBS and other related disorders.”
• “For many, CBD holds the answers to treating depression.”

Based on these warning letters, industry stakeholders believed that the FDA would take action only against CBD manufacturers who marketed products with claims to treat serious diseases. However, in September 2019, the FDA issued two warning letters to CBD manufacturers for marketing CBD as a dietary supplement and conventional food, in violation of federal law. In these two warning letters, the agency did not cite any examples of problematic claims. See FDA Warning Letter to Herbal Healer Academy, Inc. (Sept. 12, 2019) and FDA Warning Letter to Alternative Labs (Sept. 19, 2019).

Although these recent letters are obviously concerning to CDB food and supplement sellers, it is unclear if these were isolated enforcement efforts or the beginning of a trend.

Key Takeaways

Congress is pushing for the FDA to provide a policy of enforcement discretion for CBD, as well as a clear regulatory framework. Meanwhile: CBD dietary supplements, foods, beverages, and ingestible animal products are illegal under the Federal Food, Drug, and Cosmetic Act. Topical CBD is legal, but only if marketed without problematic claims. The US regulatory situation is murky, but so are the rules in other countries as well.