In a non-public letter sent earlier this week, the US Department of Health and Human Services (HHS) recommended to the US Drug Enforcement Administration (DEA) that marijuana be re-classified under the Controlled Substances Act (CSA) from Schedule I to Schedule III.  The recommendation is a key first step to changing the legal status of marijuana since its original classification as Schedule I in 1971.

This announcement follows the Biden Administration’s October 2022 statement on marijuana reform which calls on HHS and DEA to reconsider marijuana scheduling.  In that announcement, the White House stated, “Federal law currently classifies marijuana in Schedule I of the Controlled Substances Act, the classification meant for the most dangerous substances.  This is the same schedule as for heroin and LSD, and even higher than the classification of fentanyl and methamphetamine – the drugs that are driving our overdose epidemic.” 

As a result of that announcement, the Food and Drug Administration (FDA) – an agency within HHS – conducted a medical and scientific review of marijuana under what is known as the eight factor analysis.  That analysis, among other things, considers a drug’s abuse liability, which includes its abuse potential (including its history of abuse), pharmacological effect, and overall risk to public health.  FDA routinely conducts this type of analysis for drugs and makes a recommendation to DEA, the agency with authority under the CSA to classify drugs into give distinct categories or schedules depending on the drug’s acceptable medical use and the drug’s abuse or dependence potential. 

As the DEA explains:

ScheduleDefinitionExamples
Schedule I“no currently accepted medical use and a high potential for abuse”Heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methlenedioxymethsamphetamine (ecstasy), methaqualone, and peyote
Schedule II“high potential for abuse, with use potentially leading to severe psychological or physical dependence”Methamphetamine, oxycodone (OxyContin), fentanyl, Adderall, Ritalin
Schedule III“a moderate to low potential for physical and psychological dependence”Tylenol with codeine, ketamine, anabolic steroids, testosterone
Schedule IV“a low potential for abuse and low risk of dependence”Xanax, Darvon, Darvocet, Valium, Ativan, Talwin, Ambien, Tramadol
Schedule V“lower potential for abuse than Schedule IV and consist of preparations containing limited quantities of certain narcotics”Cough preparations with less than 200 mg of codeine or per 100 milliliters (Robitussin AC), Lomotil, Motofen, Lyrics, Parpectolin

Moving marijuana from Schedule I to Schedule III would change the cannabis industry landscape in many key ways:

  • Less restrictions on research.  Currently, marijuana researchers are required to register with DEA to access the Schedule I substance, a process that is notoriously burdensome.  These registration requirements would not apply to marijuana as a Schedule III substance and would pave the way for clinical studies to demonstrate the benefits of marijuana.
  • Availability of tax deductions for cannabis business expenses and losses.  Section 280E of the US Tax Code denies all credits and deductions, including ordinary business expenses, from gross income of businesses illegally trafficking in a Schedule I or Schedule II controlled substance.  Section 280E would no longer apply to marijuana as a Schedule III substance, providing cannabis business with a key deduction availability—especially in light of relatively high effective tax rates cannabis companies are subject to by federal, state and local governments.
  • Better chances of the Safe Banking Act becoming law.  Attempts to pass the Safe Banking Act (which would explicitly open access to institutional banking and lending in cannabis) have failed several times in Congress.  The rescheduling of marijuana from Schedule I to Schedule III may provide more hesitant lawmakers with more political cover to move the bill through.
  • Some expanded availability of business with US financial institutions.  Moving marijuana from Schedule I to Schedule III could lead to perceptions of decreased risk and entice financial institutions with more risk tolerance to engage with cannabis companies—resulting in increased access to lending and consumer financial services, including payment processing.
  • Potential increased access to capital markets and institutional investment.  It is possible that prominent national exchanges in the United States or Canada may change their policies to enable listing of companies engaged in the US cannabis business.  Should such a change be made by prominent Canadian or United States national stock exchanges, that is likely to facilitate access to increased liquidity, capital raising opportunities and institutional capital that may not otherwise be available at the present time.  Currently, the Canadian Securities Exchange is the destination for public trading of most US cannabis companies with publicly traded securities.

With HHS’s recommendation in hand, the issue is now under the DEA’s review. If DEA agrees with FDA’s analysis and conclusion, DEA will then then publish its proposal to reschedule marijuana and offer an opportunity for public comment before finalizing any rescheduling. It will be important for the cannabis industry, and other interested stakeholders, to weigh in on this issue since the outcome will have a substantial effect on cannabis use in the US. 

To find more about this important development, please contact either of the authors or your usual DLA Piper attorney.

We’ve written previously about FDA’s denial of three petitions requesting that the agency issue a regulation that would allow cannabidiol (CBD) products to be marketed as dietary supplements.  FDA also issued a call for a legislative fix to allow broader access to CBD products, stating that it did not consider existing dietary supplement and conventional food pathways appropriate for CBD and that the agency is interested in working with Congress to develop a new pathway that balances consumers’ desire to access CBD products with the regulatory oversight necessary to better manage the risks these products present. 

In a move somewhat at odds with FDA’s position, Representatives Morgan Griffith (R-VA) and Angie Craig (D-MN) have recently re-introduced two bills: the CBD Product Safety and Standardization Act, which would require FDA to regulate CBD like other food ingredients, and the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act, which would legalize hemp and hemp-derived products (including CBD) for use as a dietary supplement. 

The CBD Product Safety and Standardization Act would direct FDA to allow CBD derived from hemp in foods by treating it as an approved food additive or generally recognized as safe (GRAS).  The bill would require FDA to issue a rule, with public notice and comment, to specify a maximum amount of cannabidiol derived from hemp per serving, as well as labeling and packaging requirements, and conditions of intended use. 

This bill is curious for a number of reasons. First, the determination of safety of a food ingredient is usually a decision left to the agency, based upon scientific data, and determined not by legislators.  Second, this bill seems to presume that there is a safe level, despite the Agency’s position that “FDA has seen only limited data about CBD safety and these data points to real risks that need to be considered before taking CBD for any reason.”  It is unclear how, if the bill were enacted into law, FDA would carry out these requirements where the Agency believes it has insufficient data to make these public health decisions. 

Similarly, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act provides that hemp, CBD derived from hemp, and any other ingredient from hemp “shall be lawful for use . . . as a dietary ingredient in a dietary supplement,” but conditions the legality on compliance with requirements for a dietary supplement under the Food, Drug, and Cosmetic Act.  This requires similar public health decisions around the safety of dietary ingredients that FDA has expressed it has insufficient data to make. 

The re-introduction of these two bills sends a message to FDA that some members of Congress want FDA to solve these problems under the current framework of the Food, Drug, and Cosmetic Act.  Whether that message will be fully delivered by enacting these two bills into law, and what FDA will do once that message is received, remains to be seen.

Section 201(ff) of the FD&C Act defines dietary supplements to exclude products that contain active drug ingredients (ie, ingredients that have been approved under section 505 of the FD&C Act or have been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations have been made public).  There are exceptions to this exclusion if the substance was marketed as a dietary supplement or a conventional food before it was approved or the new drug investigations were authorized, or if FDA creates an exception through notice and comment rulemaking.  To date, FDA has never created an exception through rulemaking.

While many have criticized the agency as unwilling to ever issue such an exception to the exclusionary provision, the agency has recently suggested its willingness to do so in the case of N-acetylcysteine (NAC). 

FDA’s longstanding position has been that NAC-containing products cannot be dietary supplements because they are excluded under the exclusionary clause of 201(ff).  On March 31, 2022, the agency responded to two citizen petitions requesting reexamination of this position.  FDA denied these petitions and maintained that the substance was excluded under 201(ff), but it also stated it will consider initiating a rulemaking under 201(ff) to allow NAC to be used in dietary supplements as long as no safety concerns are raised.  Moreover, it issued a Final Guidance implementing an enforcement discretion policy for NAC products labeled as dietary supplements as long as those products would be lawfully marketed dietary supplements if NAC were not excluded from the definition of a dietary supplement and are not otherwise in violation of the FD&C Act. 

Implications for CBD

The agency’s actions are significant beyond NAC products.  This “exclusion” provision has become a hot-button issue in the cannabis space. Like NAC, FDA has determined that cannabidiol (CBD) cannot be added to products marketed as dietary supplements since CBD is an active ingredient in the approved drug Epidiolex. Those that seek to market CBD supplements have been asking FDA to create an exception for CBD.  While the 201(ff) does not outline any criteria for undergoing rulemaking, the agency has maintained that it will not create such an exception unless and until it has the data to demonstrate that such a supplement can meet all other applicable provisions, including those relating to the safety of the dietary ingredients. 

The agency’s actions around NAC demonstrate its willingness to act to allow dietary supplements to be marketed with active ingredients should the data indicate that they meet the safety standards for dietary ingredients.  This should be a signal for those that want to market dietary supplements with CBD, the principal cannabinoid in hemp. 

So how should the cannabis industry proceed under the existing statutory framework if it wants to sell dietary supplements containing CBD legally under the FD&C Act?  The agency has provided a roadmap, but it is not without its roadblocks.

First, research is needed to fill in the data gaps. If the industry wants the same exception sought by manufacturers of products with NAC, the industry needs to have the data and other evidence to assure FDA that CBD can be safely used as a dietary ingredient. This includes determining a safe level for CBD in dietary supplements. 

While the NDIN pathway is currently unavailable for CBD since FDA does not consider CBD products to be supplements, the industry should be looking to those standards if they want an exception.  The agency has detailed information on its website outlining the types of data it expects to see, including in the 2016 draft NDIN guidance.   

Furthermore, the agency has articulated the types of data it needs to address safety concerns around CBD specifically. These include data and information related to:

  • Liver injury
  • Drug interaction
  • Male reproductive toxicity
  • Sedative effects
  • Cumulative exposure
  • Effects on special populations (eg, elderly, children, adolescents, pregnant and lactating women)
  • Information on “full spectrum” and “broad spectrum” hemp extracts (eg, how they are derived, content, how they compare to CBD isolates)

Second, once this data is available, proponents of these products should meet with FDA to demonstrate the safety concerns have been addressed.  The agency has indicated it is open to such meetings and can provide feedback on the studies and data, even if the NDIN pathway is not formally available. 

Third, if the data can meet the safety standard for an NDI, the proponent should submit a petition to the agency to create a regulatory exception under 201(ff) that includes all the safety data that would be needed for a successful NDIN notification.

Going forward

While the industry has been frustrated by the agency’s lack of movement in this area, FDA maintains that it is treating CBD as it would any other ingredient under the existing statute.  The agency would say that pathways for cannabis products currently exist.  Unfortunately, these pathways are challenging for the cannabis industry. 

If the industry cannot meet existing regulatory standards, then a legislative change is necessary to create an alternative pathway for CBD and/or cannabis products.  And that, of course, is also an option, particularly in light of the growing number of states legalizing cannabis and the Biden Administration’s October 6 Statement on Marijuana Reform, which indicates an openness to changes at the federal level.

The House has passed a revised version of the Medical Marijuana and Cannabidiol Research Expansion Act, HR 8454, sending it back to the Senate for action. With previous bipartisan approval, the legislation is expected to soon head to the President’s desk.  The bill is a critical step forward in federal legalization and regulatory science of medical marijuana and cannabidiol (CBD), aiming to ease restrictions on the research and commercialization of medical marijuana and CBD products. 

According to the National Conference of State Legislatures, medical marijuana is currently permitted in 37 states, three territories and the District of Columbia.  The issue of gaps in marijuana research came to the nation’s attention in 2020, when the House Committee on Energy and Commerce hosted several hearings focused on the availability of such research. Public health experts, government agencies, and others testified, urging Congress to act to address legal and regulatory barriers that present challenges to advancing marijuana research.

Several other countries are ahead of the curve in encouraging marijuana research, as well as contributing to the scientific knowledge base for the potential of these products.  Israel, for example, became the first country to allow medical research and marijuana cultivation in 2007 and currently hosts the world’s largest number of medical marijuana clinical trials.  Over the past 15 years, Israel has reformed its approach to medical grade marijuana (to improve ease of access) and has authorized exports of medical marijuana.  Other countries with active marijuana research sectors include Uruguay, Canada, the Netherlands, and the Czech Republic.

In an effort to meet US demand, Congress has fast-tracked the bill, which would:

  • Through a registration program with the US Department of Justice (DOJ), create a pathway for marijuana research without violating the Controlled Substances Act.  Marijuana, and its derivatives, is a Schedule I drug under the Controlled Substances Act (CSA) and is illegal to possess or distribute under US federal law.  See 21 U.S.C. § 802(16).  This classification extends essentially to “all parts of the plant Cannabis sativa L,” as well as synthetic equivalents and extracts.  The bill would amend the CSA to require DOJ to receive applications to conduct marijuana and CBD research as well as applications to manufacture marijuana for research.  DOJ must approve or deny such appplications within 30 days of receipt.
  • Require DOJ to assess and address any shortages of supply of marijuana for research purposes.  DOJ, along with the Department of Health and Human Services (HHS), would be required to make this determination on an annual basis and, if there is a shortage, outline the specific steps to “restore an adequate an uninterrupted supply of marijuana, including of specific strains, for research purposes.”
  • Encourage communication between patients and physicians about the potential harms and benefits of cannabis.  The bill explicitly provides that a state-licensed physician does not violate the CSA by discussing currently known potential harms and benefits of marijuana and marijuana derivatives (including CBD) with patients (or the parents of minor patients).
  • Clarify that companies can manufacture FDA-approved drug products.  The bill would explicitly permit manufacturers to apply to commercially manufacture an approved drug containing or derived from marijuana, as well as to import marijuana products for both research and as an ingredient in FDA-approved drug products.
  • Require HHS and the National Institutes of Health (NIH) to report cannabis medical research.  The Bill would require analysis and submission of information on “the potential therapeutic effects of cannabidiol or marijuana,” the potential effects on the human body, and the barriers associated with marijuana research in states that have legalized marijuana use.

Outside of the proliferation of marijuana products in the US because of non-federal legalization, the potential that marijuana may one day be de-scheduled raises the inevitable question of how those products would be regulated.  Regulatory science is a key component of the answer.  NIH has previously identified priority areas of interest to include “evaluating the endocannabinoid system as a new target for pain and addiction therapies,” “disentangling the distinct therapeutic benefits and potential health risks of different component compounds within cannabis as they relate to pain,” and “evaluating the effects of cannabis and exposures to other substances during vulnerable periods of development.” 

Should the bill become law, the American public may be one step closer to understanding the benefits and risks of medical marijuana and CBD.

At the federal level, multiple agencies have oversight over the marketing, sale, distribution, and transportation of hemp-derived CBD products.  The chart below offers a high-level summary of these federal agencies’ current positions on products containing hemp-derived CBD.

Note that we intend this chart to provide general insights based on public commentary, enforcement actions and guidance from federal agencies; it is not intended to provide legal advice. Federal and state laws, regulations, rules and policies regarding hemp-derived CBD products are continuously evolving; given that, before you proceed with the sale or introduction of hemp-derived products, we recommend seeking legal advice.

Food and Drug Administration (FDA)
APPLICABLE PRODUCTS

Drugs, food, dietary supplements, cosmetics, animal foods, animal drugs
CURRENT POSITION[1]
FDA generally prohibits hemp-derived CBD from being added to dietary supplements, foods, and OTC drugs intended for use by humans or animals.  FDA says in a public statement, “Essentially, the relevant statutory provisions prohibit these uses of CBD because CBD was the subject of substantial clinical investigations into its potential medical uses before it was added to foods (including dietary supplements), and, separately, because CBD is the active ingredient in Epidiolex, an FDA-approved prescription drug product to treat rare, severe forms of epilepsy.”

FDA has reiterated that CBD may not be added to dietary supplements due to the prior drug exclusion under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)] given research involving CBD and given the approval of Epidiolex.

Regarding conventional foods, CBD is similarly prohibited via the prior drug exclusion under section 301(ll) of the FD&C Act, 21 U.S.C. 331(ll), given research involving CBD and the approval of Epidiolex.  FDA has concluded that CBD was not marketed in food or dietary supplements before Epidiolex was approved or before substantial clinical investigations involving CBD had been instituted.

In addition, regarding conventional foods, CBD is not an approved food additive, nor is FDA aware of any conclusion that CBD is GRAS for use in conventional foods. The latest commentary from FDA indicates that the agency does not believe existing data provides an adequate basis to conclude that CBD is GRAS.  Similarly, FDA has not approved CBD as a new dietary ingredient (NDI) for use in dietary supplements.

Notably, FDA does permit the use of certain hemp seed-derived ingredients – including hulled hemp seed, hemp seed protein powder and hemp seed oil – which have been deemed generally recognized as safe (GRAS) and which may therefore be legally marketed in human foods for the uses described in FDA’s GRAS notices.

Regarding OTC drug products (including certain topical creams), FDA has reiterated that new human and animal drugs must be approved by the FDA or conform to a “monograph” for a particular drug category before they can be legally marketed as drugs. CBD was not an ingredient considered under the OTC Drug Review.  CBD may not be added as an “active” ingredient to OTC drug products, nor as an inactive ingredient, given that CBD has known pharmacological effects on humans as well as demonstrated risks and therefore cannot be regarded as safe and suitable as an inactive ingredient.

Although FDA does not expressly prohibit CBD in cosmetic products, the agency has indicated that it may take action regarding such products if it has information that an ingredient or cosmetic is unsafe for consumers. In particular, cosmetic products containing cannabis or cannabis-derived ingredients must not be injurious to users under the conditions of use prescribed in the labeling of the product or the customary use of the product.

As to Delta-8 THC, FDA recently exercised its enforcement authority under the FD&C Act in issuing a number of warning letters to companies manufacturing products containing Delta-8 THC. In those warning letters, FDA clarified that like CBD, the use of Delta-8 THC in food products qualifies as a food additive. Delta-8 THC has not been recognized as GRAS and introducing food products with Delta-8 THC into the market violates the FD&C Act. In its warning letters, FDA also stated that like CBD, products with Delta-8 THC which are “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, and/or intended to affect the structure or any function of the body” are unapproved new drugs (whether intended for humans or animals), and products containing Delta-8 THC which are offered to treat conditions not amenable to self-diagnosis and treatment by lay persons are misbranded human drugs.

[1] The information contained herein is current as of the date of publication.

Key FDA Sources

 

Federal Trade Commission (FTC)
APPLICABLE PRODUCTS

All products
CURRENT POSITION[1]
CBD products of any type are not permitted to make scientifically unsupported health claims (i.e., claims that a product can prevent, treat, or cure serious medical conditions). Such claims, whether represented directly or indirectly, expressly, or by implication, are deemed to be unfair or deceptive acts or practices in violation of the Federal Trade Commission Act.

In December 2020, FTC announced Operation CBDeceit, its first law enforcement crackdown on deceptive claims in the CBD product space.  The FTC took action against six sellers for making a number of “scientifically unsupported claims” about CBD products’ ability to treat a variety of health conditions, among them cancer, heart disease, diabetes, hypertension, Alzheimer’s disease and anxiety.

These products also made comparative health claims stating that CBD products were able to treat pain better than prescription medications and that CBD products were safe for all users. The FTC approved final administrative consent orders against these sellers in March 2021.

In May 2021, FTC continued its enforcement under Operation CBDeceit with another round of enforcement targeting the online CBD store Kushly. The agency reiterated that CBD products are subject to the FTC Act.

Throughout 2021, FTC also issued a number of warning letters to manufacturers and sellers of CBD products who had made similar unapproved drug and dietary supplement claims.

Through this activity, the FTC is affirming that CBD products which make health claims will be “held to the highest substantiation standards” and that marketers “can expect careful scrutiny” of promises made in connection with CBD products.

[1] The information contained herein is current as of the date of publication.

Key FTC Sources

 

US Department of Agriculture (USDA)
APPLICABLE PRODUCTS

Not applicable
CURRENT POSITION[1]
The 2018 Farm Bill legalized hemp by removing it from the definition of marijuana in the Controlled Substances Act.  Under the revised definition, hemp means 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 Thus, states may not prohibit the interstate transport or shipment of hemp and derivatives of hemp lawfully produced under the 2018 Farm Bill.  Notably, the 2018 Farm Bill does not address CBD consumer products, such as foods, dietary supplements, cosmetics, or OTC drugs.

On January 19, 2021 (effective as of March 22, 2021), USDA published a final rule setting forth regulations for the production of hemp in the United States. Importantly, the rule “does not address ‘in-process materials,’ processors, end-products, processing of CBD or other cannabinoids or anything that may contain hemp or hemp byproducts.”

The final rule requires producers to dispose of plants which contain THC in excess of 0.3%, with producers subject to negligent violations if found to have produced (and failed to dispose of) plants with THC of 1% or more. Producers may only receive one negligent violation in a growing season.

The final rule also sets forth sampling and harvesting requirements (for example, hemp crops must be harvested within 30 days of sampling and testing). Hemp crops must also be tested using DEA-registered laboratories, although in recognition of the insufficient number of DEA registered labs, enforcement flexibility allowing testing at non-DEA registered labs has been extended until January 1, 2022.

Additionally, in May 2019 the Office of General Counsel issued a legal memorandum summarizing new hemp authorities,  which states USDA’s legal conclusions regarding the 2018 Farm Bill, including: (i) as of the Bill’s enactment, hemp is no longer a controlled substance under schedule I of the Controlled Substances Act; (ii) states and Indian Tribes may not prohibit interstate transport or shipment of hemp lawfully produced under a state or tribal plan or under a license issued under the USDA plan or lawfully produced under the 2014 Farm Bill; and (iii) a person with a state or federal felony conviction related to a controlled substance is subject to a 10-year ineligibility restriction on producing hemp.

On April 25, 2022, USDA published questions and answers related to the Hemp Production Program on its website (the “Q&A”). The Q&A restates the agency’s position that hemp is deemed to be 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,’ with no more than a 0.3 percent concentration of THC.” It provides further details regarding plan management, obtaining a grower’s license, sampling and testing, import, export, shipping, and other matters pertinent to the Hemp Production Program. The Q&A refers individuals to FDA’s published questions and answers for more information on cannabis derived products including CBD.

[1] The information contained herein is current as of the date of publication.

Key USDA Sources

 

Drug Enforcement Administration (DEA)
APPLICABLE PRODUCTS

All products
CURRENT POSITION[1]
The 2018 Farm Bill expressly excluded hemp from the definition of marijuana, and therefore hemp is not regulated as a controlled substance.

In August 2020, DEA published an Interim Final Rule (IFR) to implement conforming changes to its regulations as a result of the 2018 Farm Bill. Consistent with the 2018 Farm Bill, the DEA IFR modifies the listing of “tetrahydrocannabinols” on the Schedule of Controlled Substances by adding the following stipulation:  “Tetrahydrocannabinols does not include any material, compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o.”

DEA’s position in the IFR is that the “definition of hemp does not ‘automatically’ exempt any product derived from a hemp plant”; instead, a cannabis derivative, extract, or product that exceeds 0.3% Delta 9 THC is a Schedule I controlled substance, even if it was derived from a legal hemp plant containing 0.3% or less of Delta 9 THC.

Notably, the DEA provides through the IFR that the 2018 Farm Bill does not impact the control status of synthetically derived tetrahydrocannabinols, and all synthetically derived tetrahydrocannabinols remain schedule I controlled substances.  There is an ongoing court case in the D.C. Circuit regarding the IFR and whether hemp extracts with elevated THC levels are illegal, even if derived from hemp. See Hemp Industries Association et al. v. U.S. Drug Enforcement Administration et al., No. 21-5111 (D.C. Circuit).

On the topic of Delta-8 THC, DEA has provided commentary in the form of a letter response to the Alabama Board of Pharmacy’s inquiry regarding the control status of Delta-8 THC. In that letter, DEA explained that Delta-8 extracted from hemp would still meet the definition of hemp and thus would not be controlled under the Controlled Substances Act.  In the letter, DEA also further clarified that Delta-8 THC that is “synthetically produced” from non-cannabis materials would be a controlled substance.  While DEA’s public commentary provides relevant insight, the absence of rulemaking or formal guidance on this topic has led to a patchwork of inconsistent state approaches in regulating Delta-8 THC.

[1] The information contained herein is current as of the date of publication.

Key DEA Sources

 

Alcohol and Tobacco Tax and Trade Bureau (TTB)
APPLICABLE PRODUCTS

Wine, beer, other malt beverages, distilled spirits
CURRENT POSITION[1]
TTB follows FDA’s position that hemp-derived CBD is not permitted in foods, and the agency has stated in Industry Circular 2019-1 that hemp-derived CBD is not permitted in alcoholic beverages.  This means that TTB will not approve a formula containing hemp-derived CBD.  As noted by TTB, formula approval technically applies to both interstate and intrastate sales (“In the interim, we note that alcohol beverages containing ‘hemp’ ingredients (including alcohol beverages sold exclusively in intrastate commerce) continue to require formula approval under TTB regulations”).  Applicants will have the option of resubmitting the formula to TTB upon receipt of a favorable individual determination from FDA on the regulatory status of their ingredients.

Ingredients from hemp seeds or hemp seed oil are permitted in alcoholic beverages.

TTB is in the process of updating its 2018 Guidance on the use of hemp ingredients in alcohol beverages to reflect the recent changes to the law.  Per TTB, the 2019-1 Circular reflects TTB’s most recent guidance.

[1] The information contained herein is current as of the date of publication.

Key TTB Sources
United States Postal Service (USPS)
APPLICABLE PRODUCTS

All products
CURRENT POSITION[1]
In June 2019, USPS added a section for Hemp-based Products (453.37) in its Publication 52.  This section provides that hemp and hemp-based products, including CBD with THC concentration not exceeding 0.3% on a dry weight basis, are permitted to be mailed when: (1) the mailer complies with all applicable federal, state and local laws pertaining to hemp production, processing, distribution and sales; and (2) the mailer retains records establishing compliance with such laws, including laboratory test results, licenses or compliance reports, for no less than two years after the date of mailing.

With respect to vaping products specifically, the USPS issued a Final Rule on October 21, 2021 that  prohibits the mailing of ENDS (electronic nicotine delivery system) products through USPS, including hemp vape products.  The Final Rule clarified that hemp and hemp derivatives containing less than 0.3 percent THC by dry weight, including hemp-derived CBD products, are generally mailable (consistent with Publication 52) unless the hemp is incorporated into an “electronic device that delivers” the hemp “through an aerosolized solution,” i.e., an ENDS product. The Final Rule also states that items that are used with hemp, i.e., hemp pipes and accessories, “may fall outside the definition of drug paraphernalia” if not mailed with a controlled substance, and thus, are also mailable.

[1] The information contained herein is current as of the date of publication.

Key USPS Sources

 

US Customs and Border Protection (CBP)
APPLICABLE PRODUCTS

All products
CURRENT POSITION[1]
CBP has not issued regulations or formal policies with respect to the import or export of finished consumer products containing hemp-derived CBD.  In informal FAQ guidance, Customs and Border Patrol has publicly acknowledged only that hemp seeds and hemp plants can be imported into the United States pursuant to the 2018 Farm Bill.

Thus, some uncertainty remains around importing finished CBD consumer products into the United States. There still is significant confusion among regulators regarding such things as differentiation between marijuana and hemp based on currently available analytical methods. These uncertainties may lead to the risk of seizure. Companies should consider obtaining a Ruling Letter from CBP to confirm the tariff classification of the proposed shipment of CBD products pursuant to 19 CFR Part 177.  Such Ruling Letters have been issued to companies proposing to import CBD Oil and CBD in bulk powder (isolate) form.

With respect to importation of hemp seeds and hemp plants, CBP posted online a temporary policy titled “Importing hemp seeds and hemp plants into the United States” on January 11, 2022.  Under this temporary policy, CBP was accepting electronically produced copies of phytosanitary certificates through March 31, 2022.  However, this temporary policy has been withdrawn and currently, USDA/APHIS and CBP will only accept original phytosanitary certificate and forms for plant commodities.

[1] The information contained herein is current as of the date of publication.

Key CBP Sources

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In this inaugural article we will introduce each type of intellectual property protection and set out some preliminary questions raised by the legalization of hemp. In the series of posts which follow, we will explore the answers to those questions and continually update those answers as the hemp and CBD regulatory and legal landscape continues to evolve.

Continue Reading Intellectual Property and Hemp/CBD

The hemp industry is growing on a global scale with many private equity groups, investors, venture capitalists, industry leaders, and established corporations seeking to take advantage of consumer and commercial opportunities in this industry. However, many hemp producers, investors, and corporations alike worry about complying with the hemp regulations since there is an inconsistent patchwork at the state and local level and complex, evolving federal regulations. Continue Reading Consequences of Producing Non-Compliant Hemp