2021: The year of positive CBD policy changes

(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the hemp industry. Havens co-chairs the Cannabis Law and Food, Beverage and Agribusiness Practices at Saul Ewing Arnstein & Lehr law firm in Washington DC.)

The hemp industry has been waiting with bated breath for the release of the U.S. Food and Drug Administration’s Cannabidiol Enforcement Policy Draft Guidance.

FDA sent the draft to the White House Office of Management and Budget last July. Of all FDA documents currently under review at the OMB, the CBD policy has been pending the longest. And it does not appear that the OMB will clear the document during the waning days of the Trump Administration, meaning that it will be up to the OMB under President-Elect Joe Biden to decide what to do with it.

Despite many predictions about what the document might contain, it appears that no one outside of FDA or the White House has yet seen the guidance.

Although FDA’s priorities could change once President-elect Joe Biden is inaugurated next Wednesday, FDA’s approach to CBD is unlikely to shift materially, if at all.

In fact, although Biden has yet to name his pick for FDA Commissioner, one potential candidate seems to be Dr. Amy Abernethy, who currently serves as the Agency’s principal deputy commissioner and leads FDA’s CBD Working Group.

Assuming Biden nominates Dr. Abernethy, we might expect a continuation of FDA’s deliberate and protracted review of CBD. Regardless, it seems that the White House could clear the enforcement policy sometime this year, perhaps mid-second quarter. Again, though, it is not yet clear what the guidance will contain.

One theme that FDA has focused on continuously – from its May 2019 CBD hearing to the November 2020 sex and gender scientific conference to FDA comments in recent days (including by Dr. Abernethy) – is that it needs more data regarding CBD product safety.

Industry is cautiously optimistic that FDA’s next CBD sampling report (also expected this year) will show that leading products sold in chain retail outlets are labeled appropriately and accurately; the results contained in the last report to Congress were not representative of the industry, in that FDA tested only products sold online that made disease claims.

Presuming the CBD enforcement policy is released and is not the panacea that some hope it will be (i.e., it is not a complete 180-degree turn from FDA’s current view), it is expected that some in Congress will renew their push for hemp-derived CBD to be permitted as a dietary ingredient for use in supplements.

Congress steps in

H.R. 8179 – a bill to permit hemp, CBD derived from hemp, and any other ingredient derived from hemp as dietary ingredients – was introduced last year but didn’t come to a vote; a new version will likely be introduced for consideration by the current Congress. Some in Congress might wait to see if FDA’s enforcement policy addresses the legislation’s goals. It will be interesting to see how much Congress listens to FDA’s suggestions on hemp and its derivatives as dietary ingredients, including dosing suggestions and research requirements before ingredients can be used. In its “technical comments” to H.R. 8179, FDA appeared to differ greatly from the approach some members of Congress were pursuing.

While reasonable people can disagree about the best approach to federal CBD policy – legislative reform, formal FDA enforcement discretion, FDA notice-and-comment rulemaking, some combination thereof, or something entirely different – most everyone can agree that federal uniformity is preferable to the current state-by-state, and even locality-by-locality patchwork that is administratively burdensome for industry, at best, and dangerous from a consumer-litigation exposure perspective, at worst.

Another benefit to uniformity is that compliance with a robust, consistent federal standard would help ferret out noncompliant firms, thus elevating the profile of the entire industry. Because of inconsistent state and local standards, and even more inconsistent enforcement of the same, consumer experience can vary, especially when it comes to products sold exclusively online.

Despite the clear benefits of federal uniformity, it is important to not fall into the trap of thinking that any type of uniformity is preferable to the current landscape.

In discussions with industry stakeholders, it’s not uncommon to hear statements like “as soon as we get clarity from FDA, everything will be easier.”

FDA has been quite clear about what is permitted when it comes to CBD and what is not. Arguably, we know exactly where the FDA stands, and the devil we know (i.e., no CBD food or supplement products, but unless you make aggressive disease claims, you likely will not hear from FDA) might be better than the devil we don’t know (e.g., FDA adopting arbitrarily low limits of CBD per serving).

Clarity from FDA isn’t needed; sensible CBD policy is.

Next steps

As mentioned above, FDA’s last CBD sampling report to Congress provided little valuable insight into how most of the CBD industry complies with robust product standards.

As any hemp operator who has worked with a national distributor or sold products in a national chain store can attest, labeling compliance, rigorous third-party testing, evidence of insurance, and brand regulatory support, among other things, are prerequisites.

Said differently, brands that sell their products in major retail outlets are already responsibly operating, even in the absence of national uniform regulations.

It has been more than two years hemp since hemp was made a legal crop. Enactment of the 2018 Farm Bill was a major win for the hemp industry.

However, it was only a half-victory. Given FDA’s indication that CBD rulemaking could take several years, and in light of the fact that the cannabidiol enforcement policy – even if it is helpful to industry – will not be a permanent solution, it is incumbent upon Congress to amend existing law to permit certain CBD ingestible products, presuming such products comply with sensible labeling and safety standards.

Otherwise, the hemp industry will continue to suffer as a result of end-product format restrictions. The confluence of the release of FDA’s CBD enforcement policy and the reintroduction of legislation to permit CBD as a dietary ingredient could mean that the framework for a national uniform CBD policy standard could be in hand by this summer.

Jonathan Havens can be reached at [email protected].