Baby Steps in a Victory for Industrial Hemp and the CBD Industry

For the first time since the passage of the Controlled Substances Act (CSA) in 1970, it is legal at the federal level to grow, possess, and market certain types of products derived from a cannabis sativa plant. Under the landmark Agricultural Improvement Act of 2018 (commonly known as the Farm Bill), which went into effect January 1, 2019, the U.S. Department of Agriculture (USDA) will regulate industrial hemp and the cannabidiol (CBD) derived from it, removing the plant from Schedule I prohibition. Section 12619 of the Farm Bill also removes certain hemp-derived products from Schedule I status under the CSA.

Though the Farm Bill represents a significant step forward for the industry, strict regulation makes clear this action is a “baby step.” For example, the Farm Bill authorizes CBD only to the extent that it is contained in hemp produced in a manner consistent with the Farm Bill and other Federal and state regulations. Further, businesses looking to tout the health benefits of hemp-derived CBD by marketing CBD-containing products will find significant roadblocks imposed by the U.S. Food and Drug Administration (FDA). Indeed, following the passage of the Farm Bill, the FDA issued a press announcement clarifying that FDA currently considers CBD a drug that must go through the FDA approval process, and an illegal food product absent further FDA approval. The FDA sent a strong signal that it will take enforcement action against companies illegally selling hemp-derived products that are being marketed in violation of the FDA’s authorities. The Farm Bill also gave states wide latitude in regulating hemp within their borders, and states like California have barred the use of CBD in “infused” foods and alcohol products.

Regardless, the Farm Bill paves the way for marketing and sale of many hemp-derived products, even in food products. For example, the FDA concurred in Fresh Hemp Food’s conclusion that hulled hemp seeds, hemp seed protein powder, and hemp seed oil are “Generally Recognized As Safe” (GRAS) in response to the company’s GRAS notices, though FDA noted that these products contain “only trace amounts of THC and CBD.” Non-food products, such as hemp-derived CBD creams, are already in wide distribution.

Hemp’s new legal status also represents a new frontier in applicable environmental laws, including under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). To date, the U.S. Environmental Protection Agency (USEPA) has not registered any pesticides for use on cannabis as a result of the historic Federal prohibition. With the passage of the Farm Bill, however, EPA may now consider approving applications to register pesticides for use on hemp under FIFRA and any related petitions for tolerance or exemptions for tolerance as needed for food use under the Federal Food, Drug and Cosmetic Act (FFDCA).

The de-scheduling of industrial hemp in the 2018 Farm Bill is a significant win for industrial hemp and the individuals and business that utilize it, but it is just the first step. The ability of industrial hemp businesses to adapt to rapidly evolving state and Federal regulations will be critical to developing—and maintaining—a robust business.

©2019. Published in The Voice, Vol. 18, No. 6, February 13, 2019, by the DRI - The Voice of the Defense Bar. Reproduced with permission. All rights reserved.