Locke Lord QuickStudy: Is the tail wagging the dog? Large retailers’ embrace of CBD health products may force the ‎FDA’s hand

Locke Lord LLP
April 5, 2019

The 2018 Farm Bill marked a significant victory for the cannabis industry because it removed hemp from the list of federal controlled substances. It was widely believed that this legalization would increase acceptance of cannabidiol (CBD), a non-psychoactive cannabinoid that can be extracted from hemp and, its proponents argue, provide a range of health benefits. More widespread acceptance appears to be coming to fruition, even though the Food and Drug Administration (FDA) remains as a potential stumbling block.

Upon passage of the Farm Bill, FDA Commissioner Scott Gottlieb announced that under the Food, Drug, and Cosmetic Act it continues to be illegal to “introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.” That is because CBD is already an active ingredient in an FDA-approved drug, and thus any additionally approved usages must go through the FDA process, including clinical trials. Some companies have parsed Gottlieb’s words pretty thin and are adding CBD oil to made-to-order food and drink at the point of sale, and therefore not introducing any food products containing CBD into interstate commerce. To date, the FDA has not taken a public position on this practice.

Although Commissioner Gottlieb’s initial declaration was ominous, he subsequently softened his tone. In February, he testified before Congress, stating, “I’ll say at the outset that we heard Congress loud and clear with respect to” the Farm Bill. He acknowledged that CBD “does have therapeutic value and [that] has been demonstrated.” He subsequently announced that the FDA would hold its first-ever public hearings on CBD on May 31. There is significant anticipation surrounding the May hearings because the direction of the CBD industry will be dramatically impacted by any regulations the FDA may put into place. It is expected that the FDA hearings will focus on how CBD manufacturers can ensure the safety of their products from manufacturing through the entirety of the supply chain, and will likely also include discussions about labeling requirements and concentration levels.

Although the public hearing will provide the CBD industry with its most high-profile opportunity to tout both the health benefits and safety of CBD, key retailers are already moving forward with plans to sell CBD products. Just last week Walgreens announced that it will begin selling CBD topical creams, patches, and sprays in Oregon, Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois, and Indiana. Interestingly, none of these retailers have restricted sales of CBD products to only those states that have legalized cannabis at the state level.

These developments threaten to overwhelm the FDA’s cautious approach. With retailers already taking the leap, CBD products have arguably obtained a seal of approval more significant than anything the FDA can bestow. If these products gain widespread acceptance with the public and there do not appear to be any serious adverse health or safety effects, there will be significant pressure on the FDA to more promptly approve the use of CBD in food and beverages. And if that approval is not forthcoming, Congress could intervene to force the issue.

In short, the upcoming FDA hearings may provide a coming-out party for the CBD industry and give it a public forum to tout CBD’s benefits. But events on the ground may make those hearings more theater than anything else. If CBD creams, oils, and other products gain a popular following without adverse effects, we suspect CBD will be permitted in foods and beverages sooner rather than later.