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Beyond the Crackdown: New York Classifies Hemp-CBD as a Dietary Supplement (Part One)

Home of “dietary supplement” CBD.

This post is part one of two on how the State of New York is regulating CBD.

Last week, New York City’s Department of Health (“DOH”) quarantined a number of edible products that contained hemp-derived CBD (“Hemp-CBD”) and announced that Hemp-CBD would not be allowed in food products in the City. Eater first broke the story, but the crackdown made national news with the Wall Street Journal, the New York Times, NBC, and Fox all publishing stories on the event. It is unsurprising that the DOH action drew such coverage. CBD is massively popular, New York City is the largest city in the United States, and the story is compelling because the DOH actually sent out agents to quarantine products, rather than simply issuing a statement. It seems to be this last point that garnered national attention based on the relative lack of coverage of a very similar story a few months ago.

On December 18, 2018, shortly before the signing of the 2018 Farm Bill, the New York State Department of Agriculture and Markets (the “Department”) issued a series of frequently asked questions (“FAQs“) and a CBD Processor Template Agreement (“CBD Agreement“) that were both focused on Hemp-CBD. Unlike the DOH, the Department did not take any enforcement action. Coverage of the FAQs and the CBD Agreement was sparse. Now that New York City is taking action, it’s time to dig into the state’s position on Hemp-CBD.

The Department oversees New York’s industrial hemp program, which was promulgated under the 2014 Farm Bill. Rather than issuing licenses or permits, the Department enters into research agreements with individuals and companies who wish to process hemp into commercial products. The Department uses a number of template agreements available online. The CBD Agreement applies to processors who wish to create Hemp-CBD products intended for human consumption.

The FAQs and the CBD Agreement make it clear that the Department is intending to treat Hemp-CBD as a dietary supplement. The FAQs state that an individual cannot “sell any item for human consumption that has CBD as an ingredient unless” the two following standards are met:

  1. The item is produced under the rigorous dietary-supplement standards described in the CBD Agreement; and
  2. The item is properly labeled and packaged for sale pursuant to FDA regulations for dietary supplements.

The FAQs elaborate on its dietary supplement standard:

What is the difference between a dietary supplement and a food product?

No product for human consumption that has CBD added to it can be labeled and marketed as a food. All extracted CBD and CBD products must be manufactured pursuant to FDA dietary supplement standards and must be labeled and marketed as a dietary supplement[.]

What are “dietary-supplement standards” or “dietary supplement GMP”?

The FDA sets three levels of Good Manufacturing Practices (GMPs): one GMP standard for foods, a more rigorous GMP standard for dietary supplements, and an extremely rigorous GMP for pharmaceuticals. Products listing CBD as an ingredient must be manufactured pursuant to the dietary-supplement standards. The dietary supplement GMPs are federal, and are described here: https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/cfrsearch.cfm?cfrpart=111

This section is titled “Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements.” Any product for human consumption that lists CBD as an ingredient must be manufactured pursuant to these dietary-supplement standards.

This dietary supplement classification applies to any “product that is a combination of ready-to-eat food with additional CBD infusions or CBD extracts, such as CBD chocolate syrup or CBD soda or CBD-infused frosting drizzled cookies.” The FAQs also apply to CBD-Hemp from other states: “products made from industrial hemp that are sold in NYS must meet NYS standards, regardless of where the product is processed or manufactured.”

It should be noted that the Department acknowledges that its jurisdiction over Hemp-CBD is limited. For example, the Department does not require businesses to apply to the Department to add pre-manufactured Hemp-CBD to another product such as a topical or to develop products using CBD is sourced from another state. There is also no requirement to obtain any authorization from the Department to sell Hemp-CBD products. However, if the product is sold anywhere in New York State, it must comply with dietary supplement standards.

You can agree or disagree with the New York City DOH’s decision to start quarantining CBD in food, however, it does seem to be consistent with the Department’s guidance. The Department is a state agency and the DOH is a city agency so DOH’s decision may be a show of deference to the Department.

Later this week, I’ll analyze the CBD Agreement and how it provides additional insight into the state’s position on Hemp-CBD.

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Hawaii Committee Unanimously Approves Bill to Legalize Marijuana

Legislation to legalize marijuana for everyone 21 and older has been unanimously passed by its initial committee in Hawaii’s Legislature.

Hawaii Senate Bill 686 was introduced by Senator Kalani English (D) along with 11 cosponsors. According to its official summary, the measure “Legalizes the personal use, possession, and sale of marijuana in a specified quantity” and “Requires licensing to operate marijuana establishments”.

The measure sets the possession limit at one ounce. It would also allow for the personal cultivation of six marijuana plants, up to three of which can be mature. In addition, the measure establishes a licensed and regulated system of marijuana businesses.

The measure will now moves towards a vote by the full House of Representatives. Passage in the House will send it to the Senate. If also passed by the Senate, it will be sent to Governor David Ige for consideration.

For the full text of Senate Bill 686, click here.

The post Hawaii Committee Unanimously Approves Bill to Legalize Marijuana appeared first on TheJointBlog.

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State Crackdowns Against CBD Products Have Begun

Earlier this year, the Food and Drug Administration (“FDA”) began seizing various cannabidiol (“CBD”) products from store shelves. These enforcement actions reflected the implementation of the agency’s position that CBD, regardless of the source from which it is derived, cannot be lawfully sold for human consumption.

A few states, including states that have adopted industrial hemp pilot research programs under the 2014 Farm Bill, now seem to have embraced this FDA position by banning certain CBD-infused products from local stores.

Last Friday, several New York restaurants, bakeries, and bars were forced to stop selling CBD-infused foods and drinks. Officials with the New York City Department of Health confiscated those products, marking them as “embargoed.” The embargo process consists of identifying, itemizing and removing products. The Department has yet to issue a public statement or to provide further information on these actions, but it appears that state health inspectors explained to the affected business owners that CBD could not be used as a “food additive”.

This argument was similar to that used by the Maine Department of Health and Human Services (“DHHS”). Earlier last week, Maine health authorities began notifying businesses that they were required to remove all CBD-infused foods, tinctures, and capsules from their shelves. Relying on an internal report by the state Attorney General’s Office, which concluded that CBD could not be used in mass-market food until Maine’s hemp pilot program receives federal approval pursuant to the 2018 Farm Bill, the Maine DHHS determined that CBD was an unapproved food additive that the FDA does not recognize as safe.

Section 201(s) of the Food, Drug, and Cosmetic Act (“FD&C Act”) defines “food additive” to encompass any substance that may reasonably be expected to directly or indirectly affect or become part of a food. Until a food additive is tested and reveals to be safe for its intended use, it is deemed unsafe. A food additive is considered safe if there is a reasonable certainty in the minds of competent scientists that a substance is not harmful under its intended use and condition. If a food additive is added to a food prior to FDA approval, its presence renders the food adulterated and subject to enforcement action.

Because the FDA has yet to approve CBD as a food additive, is it accurate that Hemp-CBD products, particularly edibles and infused drinks, would be deemed unsafe under the FD&C Act.

Although the state health authorities embargoed CBD edibles and other CBD products used for human consumption, they told affected business owners that they could continue selling CBD products that “could be smoked, vaped, worn as a patch or applied as lotion.” This is because cosmetics and smokable products are subject to less onerous FDA regulations than foods and dietary supplements. Nevertheless, this is all likely to change because the FDA will undoubtedly release a plan to regulate Hemp-CBD products soon.

These recent enforcement actions in places like New York and Maine threaten to spook this fast-growing industry and should remind industry players that business and legal considerations surrounding the sale of Hemp-CBD products are in a constant state of flux.

We will continue to monitor this issue and update you on other states CBD enforcement actions. Until then, don’t hesitate to contact our offices for additional information on the legal status of state and federal Hemp-CBD law and policy.

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