Highs and Lows of CBD Oil and Why You Need a Lawyer
The CBD market is expected to grow to $2.5 billion in consumer sales by 2022. Though the economic opportunity for CBD oil is so enticing, there is no straightforward path to launching a new CBD product. CBD regulations are sometimes murky, and the murkiness is compounded by the ordinary risks of running a food or supplement business (which we have covered extensively on our Services Page). Our strategy is to provide our CBD clients with the same services that we would provide any other food or supplement manufacturer, all while maintaining awareness of the special regulations associated with CBD manufacturing.
What is CBD Oil?
Cannabidiol (CBD) is a chemical compound that is found naturally in both hemp and marijuana varieties of the species Cannabis Sativa. While hemp is (mistakenly) associated with marijuana because of the shared relation to the cannabis plant family, a professional botanist can tell you they are not the same. Unlike marijuana, which contains psychoactive THC, hemp cultivars contain a much lower proportion of Tetrahydrocannabinol, or THC, which is the psychoactive component of marijuana cultivars. CBD oils that are derived from hemp contain a relatively insignificant amount of THC, and this is what enables CBD have the market potential we are seeing right now.
Marketing The Benefits of CBD Oil
Research indicates that there are compelling medical reasons to use CBD. Recent studies have pointed to CBD as a treatment for epilepsy, fighting cancers, natural pain relief, as an anti-inflammatory, and for relief from anxiety disorders.
Discussing these benefits is a source of huge regulatory risk for our CBD clients. As we’ve discussed before, all of the words we use to market food products, supplement products, and drugs are strictly regulated by the Food and Drug Administration.
On top of that, the FDA issued a warning letter in November 2017 to four CBD companies that claimed CBD could prevent or cure cancer. In a press release, a representative of the organization stated, “Selling these unapproved products with unsubstantiated therapeutic claims is not only a violation of the Federal Food, Drug and Cosmetic Act, but also can put patients at risk as these products have not been proven to be safe or effective. The deceptive marketing of unproven treatments may keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.”
We provide our CBD clients with ongoing marketing compliance guidance as they are developing their marketing strategy. We do not wait until the marketing strategy has been developed and implemented before we take a red pen to everything. We participate in the marketing discussion with the creative types so that once the copy goes live on the website, it is compliant.
The Legality and Distribution of CBD Oil
Though the situation is improving as the efficacy of CBD products becomes more scientifically clear, the legal status of CBD can be murky and inconsistent, depending on the state, but overall trending towards clarity.
A state like Indiana, for example, mandates that as long as a CBD product contains less than 0.3% THC, it can be classified as a hemp product that is therefore legal to possess and distribute.
Other states completely prohibit the sale of CBD, no matter the proportion of THC or how the product was derived.
The Drug Enforcement Administration (DEA) still maintains that CBD is illegal, and a spokesperson of the same administration explained that those dealing with illegal drugs “risk arrest and prosecution.” It was only a few months ago that a man in Nebraska narrowly escaped jail time for possession of CBD oil with 0.00% THC.
All of our CBD clients receive an introductory consultation on the legal status of CBD tailored for their state and supplemented with the updates from the latest federal developments.
How a Lawyer Can Protect You
Contact a professional lawyer to ensure your business has the protection and guidance it needs. At The Food Law Firm, we are able to provide our clients with consultation and expertise, so that you can have peace of mind.
California Hemp & CBD Attorney: Federal Update
From sunscreen to gummies, California CBD products are virtually everywhere in Los Angeles. But are CBD product sales legal in California? Ask a Los Angeles cannabis business attorney, and you’ll probably hear that classic lawyer-line: It depends.
Hemp, CBD and derivative products of both have existed in something of a legal gray area on the California cannabis market. Their availability in an array of forms has been noted to varying degrees across the state. This was true even when California only allowed medicinal cannabis production and sales, but it remains true even now that recreational sales are legal.
As a longtime Los Angeles cannabis business attorney, I’m closely familiar with the rapid legal changes in this dynamic industry. Sometimes, answers can change one day to the next. CBD (formally known as cannabidiol) is poised to become the next hottest cannabis commodity. It’s noted for its medicinal properties (particularly for joint pain, seizures, anxiety and insomnia) and low THC levels, meaning it doesn’t produce a high. It also blends well in almost everything – from cocktails to hand creams.
Federal Developments on Hemp and CBD Production and Sales
Congressional approval of the December 2018 Farm Bill helped strengthen the legal argument for California businesses selling CBD and hemp products. That measure removed CBD, industrial hemp and all derivatives of cannabis with less than 0.3 percent THC from the U.S. Controlled Substances Act. That opens the door to a myriad of possibilities for sales of legal CBD and hemp.
A few months prior to the Farm Bill, The U.S. Drug Enforcement Administration (DEA) removed CBD products with less than 0.01 percent THC from the Schedule I narcotic list (reserved for the most dangerous, addictive drugs), moving it instead to the lowest level Schedule V classification, reserved for drugs with low abuse potential and that contain limited narcotics. (To offer some perspective: That’s the same category with Robitussin AC). CBD products were finally legal for sale through a pharmacy with a prescription from a doctor, so long as the product prescribed has been approved by the FDA.
The 2018 Farm Bill just took it a bit farther by de-scheduling CBD altogether.
Even before passage of the 2018 Farm Bill or the DEA’s removal of industrial hemp and CBD from the Controlled Substances Act, the FDA approved an epilepsy drug called Epidolax, for which the active ingredient is CBD derived from cannabis sativa (as opposed to hemp). It’s used to treat rare forms of severe epilepsy.
Still, businesses eyeing the Southern California CBD market should discuss their plans with a Los Angeles CBD business attorney who can outline whatever concerns and contingencies persist. These include (but aren’t necessarily limited to) realities like:
- CBD imports aren’t legal absent a permit.
- The U.S. Food & Drug Administration (by way of its authority through the U.S. Food, Drug & Cosmetic Act) refuses to classify any food additive, ingredient, tincture, etc. with more than 0.03 percent THC as a food, while the health department in California allows higher THC-infused product manufacturing and sales, but considers anything below 0.03 percent to be governed by the aforementioned DCA.
Those in strict compliance with state medical marijuana laws are shielded from federal criminal prosecution under the Rohrabacher-Blumenauer Amendment (formerly known as the Rohrabacher-Farr Amendment). That measure blocks the U.S. Justice Department from spending any money to interfere with state-legal marijuana programs (at first it was only medical marijuana, but has since extended to recreational too).
One might presume on this basis Los Angeles businesses from restaurants to spas are free to pursue CBD sales, so long as the product was low THC. Not so fast… (And this is why it’s essential to talk to a qualified Los Angeles CBD sales attorney before launching your next product line or weekend special.)
CBD Restrictions Still Exist Under Federal Law
The primary ways in which the U.S. government is still heavy-handed on CBD regulation is with regard to food, beverages and non-approved drugs – particularly those with a higher THC content. The very same day the 2018 Farm Bill passed, the FDA issued a statement clarifying in no uncertain terms CBD was not to be used in food or unauthorized drug products.
CBD use for food – regardless of how much psychoactive THC it contains – is not allowed.
Southern California businesses with questions on CBD production and sale can direct them to our knowledgeable cannabis attorneys serving Los Angeles and Orange County.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
CBD Oil, Hemp And Cannabis Update: What Lawyers Need To Know In Advising Clients
CBD Oil, Hemp And Cannabis Update: What Lawyers Need To Know In Advising Clients
Are you seeing more and more ads for CBD? What’s legal, what’s not? What the difference between hemp, CBD and THC? Where does NY stand and what’s in store for the future?
Various states have differing laws on hemp products generally and CBD specifically. Until the FDA acts, and regardless of what the USDA does with respect to hemp production, it is still a federal offense to sell any CBD product that is to be ingested – whether it is as a dietary supplement or as an additive to foods and beverages – unless the FDA has approved those products. But what about all these CBD oil products that are being sold? This program will provide a practical basic cannabis industry update for attorneys. This program will cover CBD, hemp and the 2018 Federal Farm Bill.
Aleece E. Burgio, Esq., Special Counsel, Barclay Damon LLP
Lee Williams, Esq., Corporate Counsel, Dent Neurological Institute