Month: November 2019

Dozens of times per month, I am asked by clients and potential clients whether hemp-derived cannabidiol (“Hemp CBD”) products are legal in California. With almost any other product, I can give an easy “yes” or “no” answer. But with Hemp CBD, my answer usually takes five to ten minutes to explain and ultimately ends with “there is no clear answer, all of this could change dramatically in the next few months, and all of this will change in the next year”. Given the perplexing state of Hemp CBD laws in this state, I thought it might help to try to answer this all-too-common question here as well.

To really understand the legal status of Hemp CBD in California, one should understand the state’s stance on “cannabis”. The term “cannabis” is a legally defined term that means the Cannabis sativa L. plant with more than .3% delta-9 THC and excludes hemp, which is legally defined as the Cannabis sativa L. plant with .3% or less delta-9 THC. Cannabidiol can be derived from either cannabis (in which case it is generally legal and may be sold through the licensed cannabis chain), or hemp (in which case the law is completely unclear in many cases). If this all seems a bit confusing, it is. I won’t even try to get into the different terminology that the federal government uses.

The state cannabis agencies, ironically, prohibit licensed commercial cannabis businesses from using Hemp CBD in manufactured cannabis products or selling Hemp CBD products in licensed cannabis retail stores. Beyond that, the state has not adopted a single law that expressly outlaws Hemp CBD processing, sale, or consumption (though some cities or counties in the state may actually have laws prohibiting such activities). Instead, about a year and a half ago, the California Department of Public Health’s Food and Drug Branch (“CDPH”) released an FAQ document which stated that in spite of the fact that cannabis derivatives may be lawfully added to edibles, Hemp CBD could not legally be added to foods (including beverages and animal foods) or dietary supplements. The FAQ says nothing about many other products, such as cosmetics, smokeable hemp, or Hemp CBD vapes.

These FAQs, notably, are based expressly on federal law, and do not explicitly cite California law to support CDPH’s attempted ban on Hemp CBD foods. There are really two main arguments in the FAQs for why Hemp CBD foods are unlawful:

1. Hemp was a Schedule I (illegal) drug under the Controlled Substances Act. This argument is no longer valid, since the Controlled Substances Act (“CSA”) was amended by the 2018 Farm Bill to carve hemp out from the CSA. But either way, it is a bit odd that the CDPH was attempting to ban a substance based on its placement in the CSA, when the CDPH is also responsible for licensing cannabis manufacturers, where cannabis is a Schedule I narcotic.
2. The FDA did not allow Hemp CBD to be added to foods. This is still the case, as the FDA recently made clear. But again, it is interesting that the CDPH is relying on a federal agency’s position when it comes to Hemp CBD, but not when it comes to cannabis.

While the FAQs really only cite federal law, the CDPH has apparently been threatening enforcement actions and even pulling products under a California law that most people in the state probably aren’t aware of: the California Sherman Food, Drug, & Cosmetic Law. The Sherman Law is in many respects similar to the federal Food, Drug and Cosmetic Act (which is the basis for the FDA’s power over Hemp CBD). Notably, the Sherman Law prohibits selling “adulterated” food. There are numerous different definitions for when food is “adulterated”, but generally it means that it is poisonous, harmful, or unsafe. Though CDPH has made no public fining that Hemp CBD is actually “adulterated”, it has apparently been using this provision as the basis for its enforcement actions. In fact, the Los Angeles Department of Public Health, which to some extent acts as a local enforcement arm for CDPH policies, issued guidance stating that Hemp CBD was an adulterant.

In response to the claim that Hemp CBD was an adulterant, California Assembly Member Aguiar-Curry introduced AB-228 in early 2019, which would have expressly found that Hemp CBD was not an adulterant. In fact, when I started writing about AB-228 back in January, that’s basically all the bill did, though subsequent amendments would have created a much more robust regulatory framework for Hemp CBD. Unfortunately, the bill stalled out in committee a few months ago, so for now there will be no progress on that front. But we are basically guaranteed to see a revival of the bill in some form or another in the 2020 legislative session.

Also interestingly, there appears to have been no public challenge in the courts over whether Hemp CBD actually even qualifies as an “adulterant”. It is certainly possible that over the next few months, we could see a company that was subject to CDPH or local department of health enforcement sue and claim that Hemp CBD is not an “adulterant”. It’s possible that the CDPH would cite the FDA’s assertions that Hemp CBD could have some toxicity issues, but whether those assertions are sufficient for a state to take enforcement actions under state law is not so clear.

Ultimately, there is no great answer to the question “is Hemp CBD really unlawful in California?”, but there are some good pieces of information to consider:

• While there is no state law that bans Hemp CBD processing, sale, or consumption outside of the licensed cannabis chain, the CDPH or local departments of health may initiate enforcement actions for foods, beverages, animal products, or dietary supplements under federal authority or the Sherman Law.
• There are a number of products that the CDPH has not publicly identified as unlawful, such as cosmetics. The CDPH has jurisdiction over cosmetics under the Sherman Law, and could take the same position that they are not lawful. But they did not do so in the FAQ. It’s also possible that they could take a similar position to the FDA, which has been much less aggressive when it comes to cosmetics unless they make medical claims.
• The law is subject to change quickly. As we live in a state where a couple-page-long FAQ document, rather than a law or regulation, can support enforcement actions against an entire industry, it’s entirely possible that the CDPH or another agency could reverse course or take an entirely new position at the drop of a dime.
• We are pretty much certain that the law will change dramatically in the longer term. The FDA will issue regulations for Hemp CBD (though that may take time), and it’s highly likely that the California legislature will work on new Hemp CBD legislation in 2020.

So stay tuned to the Canna Law Blog as we continue to cover developments on the Hemp CBD front in California.

The Food and Drug Administration (“FDA”) had a busy Monday this week. On November 25, the agency issued warning letters to 15 businesses selling hemp-derived CBD (“Hemp-CBD”) products as unapproved drugs. The FDA also released updated consumer guidance on Hemp-CBD.

Warning Letters

The recent batch of warning letters appear to turn on the marketing of Hemp-CBD products as unapproved drugs. The FDA has approved CBD as a drug: Epidiolex. Epidiolex is used to treat epilepsy and requires a prescription. That’s the only approved use of CBD as a drug. The FDA determines whether something is a drug based on how the product is marketed. Any marketing material that includes a health claim will cause the FDA to classify a product as a drug.

These letters warn Hemp-CBD companies that are making health claims about Hemp-CBD products. In addition, the FDA reiterates its view that Hemp-CBD cannot be added to food or dietary supplements and states that it “cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food” based on the available data.

Consumer Update

The FDA’s update to consumers makes it appear that Hemp-CBD is a dangerous and unknown substance. Here is the FDA’s own summary of its latest updates:

1. CBD has the potential to harm you, and harm can happen even before you become aware of it.
   • CBD can cause liver injury.
   • CBD can affect the metabolism of other drugs, causing serious side effects.
   • Use of CBD with alcohol or other Central Nervous System depressants increases the risk of sedation and drowsiness, which can lead to injuries.
2. CBD can cause side effects that you might notice. These side effects should improve when CBD is stopped or when the amount ingested is reduced.
   • Changes in alertness, most commonly experienced as somnolence (drowsiness or sleepiness).
   • Gastrointestinal distress, most commonly experienced as diarrhea and/or decreased appetite.
   • Changes in mood, most commonly experienced as irritability and agitation.
3. There are many important aspects about CBD that we just don’t know, such as:
   • What happens if you take CBD daily for sustained periods of time?
   • What is the effect of CBD on the developing brain (such as children who take CBD)?
   • What are the effects of CBD on the developing fetus or breastfed newborn?
   • How does CBD interact with herbs and botanicals?
   • Does CBD cause male reproductive toxicity in humans, as has been reported in studies of animals?

Let’s start with the FDA’s first point, that Hemp-CBD may hurt you and you may not realize it. During the investigation of Epidiolex, there was some evidence that CBD could cause liver injury. The FDA is therefore concerned that the widespread use of Hemp-CBD without doctor supervision, could result in liver damage. That’s an understandable concern. But the consumer update doesn’t stop there.

The FDA goes onto warn about Hemp-CBD interactions with alcohol and other drugs. I don’t want to diminish these interactions as a legitimate concern, but I do want to point out that concerns over drug and alcohol interactions are not limited to Hemp-CBD. Pretty much all drugs can interact with other substances in a negative way. The FDA didn’t frame the issue of Hemp-CBD interactions as something to be aware of or something to watch out for; it was presented as a way that Hemp-CBD can hurt consumers.

Last year, the World Health Organization (“WHO”) issued a report on CBD, concluding that “there is no evidence of recreational use of CBD or any public health related problems associated with the use of pure CBD.” WHO also raised the issue of CBD’s interactions with other drugs, but still reached the conclusion that CBD, as a compound, was generally low-risk to public health.

Let’s move onto the second point about Hemp-CBD side effects. Here is another passage from the FDA’s Hemp-CBD consumer update:

In addition, CBD can be the cause of side effects that you might notice. These side effects should improve when CBD is stopped or when the amount ingested is reduced. This could include changes in alertness, most commonly experienced as somnolence (sleepiness), but this could also include insomnia; gastrointestinal distress, most commonly experienced as diarrhea and/or decreased appetite, but could also include abdominal pain or upset stomach; and changes in mood, most commonly experienced as irritability and agitation.

This passage raises some serious questions about side effects. It does not provide citations to the studies that lead the FDA to determine that these side-effects were serious enough to warrant inclusion on the FDA’s website. Also, how did the FDA make the determination that the most common change alertness is somnolence or the most common change in mood is experienced as irritability and agitation? Also, the FDA’s recommendation that side effects will improve if the use of CBD is stopped or the amount ingested is reduced has to based on clincial information, right? The FDA wouldn’t make an unsubstantiated medical claim online, especially when there is so much misinformation out there regarding Hemp-CBD, would it?

I don’t doubt that the FDA based its above conclusions regarding Hemp-CBD on some set of studies or other data set, but it’s hard to justify the FDA making these claims without any reference to how the FDA reached these conclusions. I’ve written before about how the FDA has a credibility problem with the American public. I don’t think this latest consumer update does the FDA’s credibility any favors.

The third point focuses on questions that remain about the safety of Hemp-CBD. These are important questions and should be considered. The fact is that the interest in CBD has eclipsed the scientific data we have available. The FDA’s questions are important and should be studied carefully. The problem is that the FDA appears to have already made a number of determinations about the dangers of Hemp-CBD without showing its work or refuting the data provided by the WHO.

Conclusion

The FDA’s approach to Hemp-CBD has been one of regulatory inaction and even obfuscation. Rather than providing guidance to or issuing regulations concerning manufacturers of Hemp-CBD products, the FDA has focused on telling consumers and Hemp-CBD businesses that most Hemp-CBD products are not legal and not safe. This latest round of warning letters and the consumer update are a continuation of this approach, but with greater intensity. The consumer update strikes a more urgent and alarming tone and the sheer number of warning letters sent out on one day is a departure from the FDA’s norm. Hopefully, the FDA has also been working behind the scenes to also establish a regulatory framework for the safe manufacture and distribution of Hemp-CBD products. The FDA’s current approach to Hemp-CBD does not seem tenable for much longer.

On November 20th, the Washington State Department of Agriculture (“WSDA”) released the hemp cultivation plan (the “Plan”) that it intends to submit to the US Department of Agriculture (“USDA”) along with a corresponding set of hemp regulations (“Hemp Rules”). This post will provide an overview of Washington’s hemp plan.

Recordkeeping, Violations, and Inspections

The Plan appears to be in-line with the USDA’s interim hemp rules, released last month. The Plan outlines recordkeeping requirements, including how the WSDA will track land where hemp is grown. The Plan also covers some requirements necessary to obtain USDA approval, including the following:

• The treatment of violations, both negligent and those with a higher culpability;
• The WSDA’s annual inspections for (a) unauthorized plant growth, (b) hemp in any form on the registered land area, (c) rogue, volunteer, or off-type hemp plants; (d) audits of existing business data and reports related to hemp; (e) compliance with required signage; and (f) assessing compliance with other applicable license terms and conditions;
• The WSDA’s ability to report information on producers to the USDA; and
• Certifying that the WSDA has resources to undertake the Plan.

THC Testing

The Plan lays out the WSDA’s procedure for testing hemp:

WSDA tests hemp for Total THC using High-Performance Liquid Chromatography (HPLC) for the determination of Δ9-Tetrahydrocannabinol (THC) and Δ9-Tetrahydrocannabinolic Acid (THC-A). Additionally, if necessary, WSDA will conduct moisture testing to determine total moisture.

The Hemp Rules, specifically WAC 16-306-090, require testing by a WSDA-run or approved laboratory using post-decarboxylation or other testing methods approved by the WSDA. WSDA will apply the measurement of uncertainty (+/- 0.06%) outlined in the USDA’s interim hemp rules to the reported THC concentration to determine if hemp material is in compliance with the 2018 Farm Bill. The Plan also includes a detailed sampling protocol for testing hemp. As we’ve written before, these testing requirements are likely to hurt the hemp industry.

Destruction and Disposal

The Plan outlines how the WSDA will dispose of hemp that tests “hot” (too much THC). If that happens, the entire lot must be destroyed. There is a caveat as a hemp producer may request a resampling or retesting within 30 days.

Producers must document the destruction or disposal of all noncompliant hemp and provide corresponding documentation to the WSDA. Producers may subject noncompliant hemp to the following disposal or destruction methods:

• Incineration;
• Tilled under the soil;
• Made into compost;
• Collected for destruction by a person authorized to handle marijuana; and
• Other manner approved by the department that would render the hemp non-retrievable.

In some cases, the WSDA also “may give notice of noncompliance to the appropriate law enforcement agency and the Washington State Liquor and Cannabis Board which regulates marijuana, with a summary of the actions taken to destroy the noncompliant hemp.”

Transportation

The WSDA also will require that producers obtain a THC certification form from WSDA, showing the results of THC testing, for any hemp that leaves the producer’s premises. Producers must ensure that this form accompanies hemp traveling through the state, along with a copy of the producer’s license. For hemp plant material that was grown elsewhere, the WSDA requires a bill of lading or other documentation demonstrating that the hemp was legally imported into Washington and is legally present in the state.

Hemp as food

Washington’s Hemp Plan incorporates some provisions that deviate from the 2018 Farm Bill. Remember, that states and Indian Tribes are free to venture outside of the confines of the 2018 Farm Bill, so long as all the requirements relating to hemp production are met. In other words, the 2018 Farm Bill sets the floor for hemp regulation and states and tribes can expand on that. That’s what Washington has done with hemp cultivated for food.

As a reminder, Washington recently passed Senate Bill 5719, which overhauled hemp production in Washington state. SB 5719 provided that hemp could be used in food. That section of the bill is now codified at RCW 15.140.040 (5), which reads as follows:

The whole hemp plant may be used as food. The [WSDA] shall regulate the processing of hemp for food products, that are allowable under federal law, in the same manner as other food processing under chapters 15.130 [(Washington’s Food Safety and Security Act)] and 69.07 RCW [(Washington Food Processing Act)] and may adopt rules as necessary to properly regulate the processing of hemp for food products including, but not limited to, establishing standards for creating hemp extracts used for food.

The Hemp Rules (WAC 16-306-100) establish a hemp food certification program where hemp producers can voluntarily certify hemp grown for human consumption. The WSDA will provide certification if a producer tests for the following:

• Nonapproved pesticide or herbicide use. A list of approved pesticides and herbicides will be maintained on the WSDA’s website;
• Mycotoxins; and
• Heavy metals, including inorganic arsenic, cadmium, lead, and mercury.

In order to participate in the certification program, the producer must inform the WSDA of their desire to participate in the program and also must reimburse the WSDA the costs of testing.

While WSDA has legal authority over hemp and for manufactured products derived from hemp that fall within the definition of food, WSDA does not have legal authority over all manufactured products. The Hemp Rules (WAC 16-306-020) outline activities outside the scope of the hemp program:

The following activities are not subject to regulatory sanctions or penalties under this chapter, except for the limitation of THC content under chapter 15.140 RCW:
(1) Possessing, transporting, marketing or exchanging legally obtained hemp and hemp products;
(2) Growing, producing, possessing, processing, marketing or ex- changing marijuana as defined in RCW 69.50.101.

The WSDA issued a memo in August indicating that hemp-derived CBD (“Hemp-CBD”) is not an approved ingredient in food. It will be interesting to see how WSDA handles hemp in food going forward. On the one hand, Washington law allows the whole hemp plant, including flower, to be used in food, in accordance with federal law. However, the Food and Drug Administration (“FDA”) has only determined that a few hemp-seed or hemp-stalk ingredients are generally regarded as safe for use in foods. The FDA has also indicated that Hemp-CBD cannot be added to food. CBD is likely to be present in hemp flower, which can be used in food. The WSDA will need to determine how it will treat food that may contain Hemp-CBD from Washington-grown hemp flower.

Conclusion

We’ll continue to monitor the WSDA’s rollout, including whether or not the Plan is altered in light of feedback from the USDA. The USDA has 60 days to approve or deny the plan, so the earliest it could be implemented would be January 2020.

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Each Sunday, we summarize a new state in alphabetical order. Today we turn to Minnesota.

The Minnesota Department of Agriculture (the “MDA”) has adopted an industrial hemp pilot plan that governs hemp cultivation in Minnesota. The MDA’s program appears consistent with the 2014 Farm Bill: “The Hemp Research Pilot Program studies the growth, cultivation, and marketing of hemp.” And it also appears that the program is consistent with certain provisions of the 2018 Farm Bill: “All first-time applicants must submit an application, pay the program fees, and pass a federal/state criminal background check. An applicant is disqualified from participating in the program if they have a controlled substance-related conviction in the last 10 years.” Minnesota hemp cultivators should therefore be aware that there will be strict requirements for hemp cultivation, unlike other states which have more relaxed rules concerning hemp cultivation.

Minnesota’s primary Hemp-CBD law is SB-12. The hemp provisions of SB-12 take effect on January 1, 2020. SB-12 will allow the sale of non-intoxicating Hemp CBD products and will impose testing and labeling requirements which are relatively strict. It will also allow Hemp CBD products to be sold to marijuana licensees if the hemp was cultivated in Minnesota, which not all other states allow (e.g., California). Per SB-12, the state health commissioner is required to create a workgroup to advise on how to regulate Hemp CBD product and submit a report to the legislature by Jan. 15, 2020. So we expect to see some kind of regulations on top of SB-12, as soon as next year.

While we’re waiting for SB-12 to take effect, there is not much guidance on most kinds of Hemp CBD products in Minnestota. The MDA states that it does not regulate food products containing Hemp CBD and instead defers to the FDA guidelines (which as we all know claim that Hemp CBD can’t be added to foods). For many other kinds of products, there just is no real guidance. And Minnesota has not yet adopted a flavored vape ban, so we don’t yet know (a) if it will, and (b) whether that would apply to Hemp CBD.

There will be a lot of changes to Minnesota Hemp-CBD laws in the future, so please stay tuned for updates.