Farm Bill Signed Into Law, Legalizing Hemp. What Can We Expect? FDA’s Response Sheds Some Light.
On December 20, 2018, President Trump signed into law the Agriculture Improvement Act of 2018 (the 2018 Farm Bill). Among other things, the 2018 Farm Bill removes hemp from the definition of "marihuana" (marijuana) in the Controlled Substances Act (CSA), thus taking it out of Schedule I.
By way of background, the Agricultural Act of 2014 (P.L. 113-79) (2014 Farm Bill) authorized states to establish agricultural pilot programs or other agricultural or academic research programs to study the growth, cultivation, or marketing of "industrial hemp." The 2014 Farm Bill defined industrial hemp as "the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.” Despite the 2014 Farm Bill’s authorization to states to establish hemp pilot programs, the legislation did not specifically address the Schedule I status of hemp. In contrast, the 2018 Farm Bill amends the CSA to state that the term marijuana does not include hemp. In addition, the 2018 law also amends the definition of hemp in the Agricultural Marketing Act of 1946, with the result being an expansion of the definition referenced in the 2014 Farm Bill. It is now clear that hemp is no longer federally illegal under the CSA, but it is also clear that the phrase "any part of the plant" includes "the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers.” This definition expansion is significant, given its inclusion of hemp-derived cannabinoids (e.g., cannabidiol (CBD)), and given the already explosive growth of the CBD-infused products market, a trend which will no doubt continue now that hemp is legal.
Now that the 2018 Farm Bill is law, many are asking: What’s next? Unfortunately, the complicated web of federal and state laws that govern hemp cultivation, processing, manufacturing, distribution, and sales did not go away overnight, and are here to stay for some time.
The bill directs the U.S. Department of Agriculture (USDA) to develop federal hemp regulations “as expeditiously as practicable.” Without a specific timetable attached to this responsibility, promulgation of regulations could take a year or more. While the law will allow states to be the primary regulators of hemp, this will only occur if a state can demonstrate to USDA that it can properly monitor cultivation and production. If states are unable or unwilling to create their own regulatory plans, USDA would maintain oversight. Until USDA issues its regulations, hemp cultivators and processors will continue to be subject to state pilot programs.
Eventually, states will submit to USDA their plans to regulate hemp. While there is not a deadline for states to do so, once a state submits a plan to USDA, the agency will have 60 days to approve it or reject it.
One of the biggest misconceptions coming out of the enactment of the 2018 Farm Bill is: Now that hemp is legal, people can do whatever they want with it and its derivatives. This is not correct. While the 2018 Farm Bill is significant, and while it will open up national and international hemp markets, there continue to be restrictions on what can be done with hemp and hemp derivatives (e.g., hemp-derived CBD). This is especially true when it comes to the addition of CBD or THC to a product regulated by the U.S. Food and Drug Administration (FDA or the Agency).
In response to the 2018 Farm Bill being signed into law, FDA Commissioner Scott Gottlieb, M.D., was quick to remind the public about what the legislation did not change: the Agency’s authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act or the Act) and section 351 of the Public Health Service Act. While this is not surprising to those that carefully read the text of the 2018 Farm Bill, which specifically preserves FDA’s authority, or to those that read the Agency’s response to the 2014 Farm Bill, it is a very important nuance.
FDA does not distinguish between hemp-derived CBD and marijuana-derived CBD, even though the latter is Schedule I and the former is not. Accordingly, FDA’s restrictions on adding CBD to products regulated by the Agency remain in place. The 2018 Farm Bill did nothing to change that. More specifically, it is unlawful under the FD&C Act 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. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the Act, it is illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements.
While some might question FDA’s position, and think that hemp’s removal from Schedule I should necessitate a different approach by the Agency, FDA’s thinking is informed by CBD’s and THC’s roles as drug ingredients. The fact that hemp-derived CBD is no longer Schedule I is of no consequence. Just as GW Pharmaceuticals did when it submitted a new drug application (NDA) for Epidiolex for the treatment of seizures associated with two rare and severe forms of epilepsy, which FDA approved in June 2018, companies have a viable (albeit expensive and time consuming) pathway before FDA to seek approval to market with therapeutic claims a human or animal drug that is derived from cannabis.
Concurrently with the issuance of its response to the signing of the Farm Bill, FDA announced that it had completed its evaluation of three Generally Recognized as Safe (GRAS) notices related to hulled hemp seeds, hemp seed protein, and hemp seed oil, and that the Agency had no questions regarding the sponsor’s conclusion that the use of such products as described in the notices is safe. As a result, these products can now be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims. In the same breath, FDA was quick to point out in its update on the GRAS notices that the review decisions do not affect the Agency’s position on the addition of CBD and THC to food. As stated in FDA and Marijuana: Questions and Answers, it is still a prohibited act under section 301(ll) of the FD&C Act to introduce into interstate commerce a food to which CBD or THC has been added.
So what are we to make of FDA’s approach to CBD or THC in foods and dietary supplements? Prior to the 2018 Farm Bill, the Agency took a largely hands-off approach to enforcement in this area, absent aggressive disease claims, which we wrote about previously. It is hard to say how aggressively FDA will pursue hemp-infused products now that the 2018 Farm Bill is law. Oddly, FDA has had a question in its “Marijuana: Questions and Answers” document regarding whether the Agency will take enforcement action regarding THC and CBD products that are marketed as dietary supplements or regarding foods to which THC and CBD has been added. In response, while FDA does not say “no,” the Agency invokes in its answer the concepts of "agency resources" and "the threat to public health," suggesting a continuation of the largely hands-off approach, again, absent aggressive disease claims and/or a threat to public safety.
Lastly, in Commissioner Gottlieb’s reaction statement, he left open the possibility that FDA could pivot (e.g., issue a regulation allowing the use of CBD in a food or dietary supplement). However, and as expected, he indicated that the Agency would only consider doing so if it is able to determine that all other requirements in the FD&C Act are met, including those required for food additives or new dietary ingredients. FDA intends to hold a public meeting in the near future for stakeholders to share their experiences and challenges with products in this space.
While many have claimed that the U.S. Drug Enforcement Administration (DEA) will no longer have a role to play in the hemp space, an open question is how aggressively, if at all, DEA will look into the source of products being held out as containing hemp-derived CBD (i.e., try to determine if they contain marijuana-derived CBD, instead). Although enforcement in the CBD space has been sporadic, now that hemp-derived CBD will be even more widely available, one has to wonder if the openness of the market and the increase in consumers will result in enhanced oversight and enforcement.
More broadly, it remains to be seen how DEA will react to the signing of the Farm Bill. Will the agency issue its own regulations, or at least a policy statement? DEA’s confusing approach to all CBD pre-2018 Farm Bill suggests that the tortured status of CBD products generally, hemp-derived or otherwise, could continue.
It cannot be denied that the 2018 Farm Bill becoming law is a significant development. At long last, the confusing legal and regulatory status of hemp will start to be clarified. As noted above, though, this clarity will not come overnight, as USDA could take at least a year to issue regulations. How long USDA will take to craft its regulations is but one open question. A few others are: How rigorous will USDA be when reviewing longstanding state hemp programs? Will processors and marketers be able to prove to DEA’s satisfaction that their products are hemp-derived rather than marijuana-derived? Will FDA look the other way when firms selling CBD-infused foods, dietary supplements, and cosmetic products take advantage of an exploding market but do not make aggressive disease claims? Will FDA issue a regulation allowing the use of hemp-derived CBD in foods and dietary supplements? We are continuing to monitor developments in this area, and will issue updates as appropriate.
In the meantime, if you have questions regarding an issue raised in this post, please contact the author or the attorney at the firm with whom you are regularly in contact.