CBD Explodes in Popularity But Hits Regulatory Wall
Following the passage of the 2018 Farm Bill, which legalized the cultivation of hemp, cannabidiol (CBD) became the star ingredient of 2019, featured on its own as an oil or in food and beverages. The U.S. Food and Drug Administration (FDA) struggled to keep up with the hype; while CBD stayed in legal limbo, U.S. lawmakers and other public officials urged the agency to take action and create a legal framework for a burgeoning industry capitalizing on the popularity of CBD and its purported calming and healing effects. Several companies went too far in their marketing, however, according to the U.S. Food and Drug Administration’s and Federal Trade Commission’s warning letters focused on the claimed benefits of the product.
The U.S. Department of Agriculture issued its interim final rule on hemp production in October, but the announcement drew hundreds of comments urging the agency to make pragmatic adjustments. Sens. Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.) sent a letter to the USDA passing along additional feedback they purportedly heard from Oregon farmers, who argued that the interim final rule set unrealistic hurdles for hemp producers.
In November, FDA issued a consumer update clarifying that the agency “is concerned that people may mistakenly believe that trying CBD ‘can’t hurt'” while studies have identified possible effects on the liver and male reproductive health. The update accompanied warning letters to several CBD manufacturers and distributors, which then triggered a number of consumer lawsuits alleging they were sold illegal merchandise under the guise of legality.
Shook’s Cannabis Law practice helped companies navigate the regulatory minefields of CBD and other cannabis-derived products. Shook also released a white paper, “Wild West or New Frontier? Global Cannabis Market Spurs Legal Spend Across All Sectors,” that drew on feedback from in-house counsel at, among other industries, food and beverage companies.
