California Passes CBD Law That Conflicts With FDA Guidance
Governor Gavin Newsom recently signed California Assembly Bill 45 (AB 45) into law, which, among other things, allows hemp-derived cannabidiol (CBD) to be included in any food, beverages, and dietary supplements sold in California. This is not only a break from California’s prior position prohibiting CBD from being included in such products even as the State began to tax and regulate its cannabis industry, but it is also in stark contrast with the U.S. Food and Drug Administration’s (FDA’s) current position on the issue. Unless and until FDA changes its guidance prohibiting CBD-infused food, beverages, and dietary supplements sold in interstate commerce, laws like California’s will continue to add to a confusing and contradictory regulatory landscape. Thus, food and beverage companies should ensure they carefully monitor state developments on this issue, which may be inconsistent with federal law and guidance.
As we have previously discussed in our Tobacco Law Blog, the Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized “industrial hemp” (a term used to refer to strains of the plant containing less than 0.3% delta-9 tetrahydrocannabinol (THC)) and its derivatives by removing hemp from the list of federally illegal controlled substances. While this watershed law legalizes the production of hemp, and by extension hemp-derived CBD, it does not regulate processed hemp-derived CBD products, such as CBD-infused food and dietary supplements. Rather, the law preserved FDA’s authority to regulate processed hemp products under the Federal Food, Drug, and Cosmetic Act (FD&C Act).
FDA, however, has been slow to act. The agency has not promulgated formal regulations, although it has issued nonbinding guidance, taking the position that CBD is a drug under the FD&C Act and that it is illegal to market CBD in interstate commerce by adding it to food or labeling it as a dietary supplement. FDA has also issued warning letters to CBD companies, but it has not taken significant enforcement action against them. FDA has accepted three generally recognized as safe (GRAS) notices for hulled hemp seed, hemp seed protein powder, and hemp seed oil, but all three of these contain only trace amounts of THC and CBD. While hemp seed oil can be legally marketed in human foods, the high CBD products most commonly seen on the market today use high-CBD oil extracted from the stalks, leaves, and flowers of hemp plants; such oil is not protected by the GRAS notifications.
In response to FDA’s inaction on formal regulation of CBD, Congress is considering legislation that would allow CBD to be used in food, beverages, and dietary supplements and require FDA to establish regulations. The success of the legislation remains uncertain, and states have stepped in to fill the void.
In the latest example of state action on CBD-infused products, California Assembly Bill 45, among other things:
- Affirms that food, beverages, and dietary supplements sold in California are not adulterated by the inclusion of “industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp,” and therefore, not in violation of the state analogue to the FD&C Act, the Sherman Food, Drug, and Cosmetic Law;
- Prohibits manufacturers, distributors, or sellers “from including on the label, or publishing or disseminating in advertising or marketing, a health-related statement, as defined, that is untrue in any particular manner as to the effects on health of consuming products containing industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp;”
- Requires the Department of Cannabis Control to prepare a report to the governor and the legislature, outlining the steps necessary for the incorporation of hemp products into the cannabis supply chain;
- Prohibits the manufacture and sale of inhalable products (not further defined) until a tax is enacted, except for the sole purpose of sale out of state;
- Prohibits the manufacture or sale of hemp products that include more than 0.3% of any THC, including delta-8 and delta-10 THC; and
- Requires the Department of Food and Agriculture and the State Department of Public Health, in consultation with the Department of Cannabis Control, if necessary, to develop a process to share license, registration, cultivar, and enforcement information to facilitate compliance and enforcement against unlicensed manufacturers or the sale of hemp that does not meet specified requirements, exempting communications shared between these agencies and local law enforcement for this purpose from the California Public Records Act.
Some details of AB 45 are similar to the policies of other states that explicitly permit the sale of CBD products, and other details are quite different. Notably, AB 45 has drawn criticism from some hemp industry groups in California due to its prohibition on the manufacture or sale of inhalable, or smokable, hemp products in California until the legislature establishes a tax on such products.
The uncertain legal landscape related to CBD-infused food, beverages, and dietary supplements leaves companies in this market navigating choppy waters, contending with detailed state requirements that may be inconsistent with each other and with federal laws and guidance.
Stephen specializes in state Attorneys General investigations and other government entities, as well as litigation.
It’s official: California legalizes CBD (but not delta-8 THC)
Blockbuster hemp ingredient CBD is now officially legal in California in dietary supplements, foods, beverages and cosmetics, as Gov. Gavin Newsom signed AB 45 into law.
It was an arduous, three-year process for the bill to wind through the state legislature, which passed the bill on Sept. 10.
“After months of negotiation between the various stakeholders, that day is finally here,” according to an email from the Amin Talati Wasserman law firm, which represents many hemp and CBD companies. “The majority of requirements under the new law are similar to existing requirements, but some are unique to California, with possibly more on the way via future regulations—adding to the ever-growing patchwork of state laws governing hemp and CBD products.”
California has paved the way with all things cannabis. It was the first state to legalize medical marijuana, back in 1996. It wasn’t quite as fast off the draw as Colorado when the Rocky Mountain state legalized recreational marijuana in 2012, but California dutifully fell in line in 2016. But even though the farm bill in 2014, and again in 2018, did its level best to legalize hemp and CBD, California managed to stay stuck in the 20 th century.
Some say it was marijuana interests that successfully lobbied the California state legislature to keep hemp and in particular hemp CBD in a regulatory gray area.
“Yet the same people hobbling California hemp for decades are behind it,” said Richard Rose, a pioneer in the hemp space. “And the OGs hate AB 45.”
Marijuana interests are definitely none too pleased with the allowance of smokable hemp—the compromise being that hemp growers can still sell out of state but not in state until the state develops a taxing scheme. This compromise is fiercely loathed by hemp farmers because the law was signed right when harvest is set to begin, leaving many hemp farmers who had been selling in state suddenly with no market.
But whatever the case, Newsom on Thursday signed AB 45, which removes much of the risk for brands and retail outlets wanting to sell CBD.
Specifics of AB45
Two things are of note.
One, the California Department of Public Health (DPH) will need to develop regulations around the sale of CBD into products for sale at the full range of retail outlets. This is expected to take several months.
“Like other states that have legalized the sale of CBD products in recent years,” said the Amin Talati Wasserman statement, “California’s law comes with its own testing, labeling, approved source and registration requirements.”
For example, the new law requires labels to include certain warning statements and a scannable barcode, website, or QR code linked to a certificate of analysis that provides specific testing information, among other label requirements.
AB45 defines “THC”—the intoxicating cannabinoid compound notorious for marijuana’s effects—to include THCA, and any THC, including delta-8 THC, delta-9 THC and delta-10 THC.
That makes California the 19 th state to restrict or ban delta-8 THC. The other states are Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Kentucky, Idaho, Iowa, Michigan, Mississippi, Montana, New York, North Dakota, Rhode Island, Utah, Vermont and Washington.
AB45 also authorizes the DPH to include or exclude “comparable” cannabinoids from the definition of THC, based on their intoxicating effect, or lack thereof.
In addition, the DPH may impose maximum serving sizes for hemp-derived cannabinoids, hemp extract and products derived therefrom, active cannabinoid concentration per serving size, the number of servings per container, and any other requirements it deems necessary.
What the FDA thinks about California legalizing CBD
The second notable thing about the California legalization effort is that yet another state has stepped in to issue regulations. CBD is legal to various degrees in all 50 states, with the possible exceptions of Idaho and Iowa.
The California law brings into sharper relief the fact that there is no real federal regulation around CBD.
It is the opinion of FDA that CBD is illegal under the Federal Food, Drug and Cosmetic Act (FDCA).
Beyond FDA standing firm on its stance that CBD is illegal in supplements—which of course has not stopped more than 3,000 brands from entering the market nationwide—the agency says it is concerned about CBD safety.
To that end, pioneering CBD brand Charlotte’s Web and legacy supplements company Irwin Naturals submitted new dietary ingredient (NDI) notifications to the FDA to demonstrate safety.
This means the California market is, in theory, strictly an intra-state deal. To be sure, California rates as the world’s fifth largest economy all on its own.
FDA’s rejection of the NDI notifications, while disappointing, is seen as putting more pressure on Congress to write legislation—again, but apart from a farm bill—to legalize hemp cannabinoids.
Recently, acting FDA commissioner Janet Woodcock described the CBD situation as a “stalemate.”
“The law is fairly clear about this,” she said.
Federal law states that a molecule or “article” studied or approved by FDA as a drug cannot later become a dietary supplement ingredient (though it does not hold in reverse—a supplement ingredient can later become a drug, as is the case with niacin and fish oil).