Looking To The Future – Florida’s Emergency Edible Rules Provide An Opportunity For Profits – And Perils

by Edd Gaus and Matt Bernstein

Nearly four years after Florida voters legalized medical marijuana, in August, the state’s Department of Health’s Office of Medical Marijuana Use published emergency rules allowing licensed medical marijuana treatment centers to produce, package, and label edible marijuana derivative products. Although initially temporary when enacted in August of 2020, the Department of Health extended the emergency rules on November 16, 2020. In addition, the Florida State Senate recently withdrew a challenge to a proposal to include adult recreational use of marijuana on the 2022 ballot, indicating that Florida is primed to allow adult use cannabis in the near future. But manufacturers looking to charge into this new market should exercise caution. At first glance, the emergency rules may seem daunting, but companies seeking to join the cannabis edibles market should expect to confront similar regulations not only in Florida but also in other states throughout the country. By learning from the evolution of cannabis regulations—both in Florida and the rest of the country—edibles manufacturers will position themselves to avoid potential civil and criminal penalties in the future.

After Congress passed the Farm Bill in 2018 allowing limited cultivation of hemp with a THC content less than 0.3%, sales of certain CBD-derivative products became legal under federal law. Recognizing this burgeoning market, Florida enacted a regulatory scheme governing CBD-derived products that meet, or fall below, the federal baseline for THC content. Florida’s emergency rules apply to products with a THC content above 0.3% THC and define edibles as “commercially produced foods made with, or infused with, marijuana oil but no other form of marijuana.” While this definition may seem straightforward, cannabis companies should be mindful of several limitations before developing a product line. For example, the rules expressly exclude “pills, capsules, tinctures, topicals or similar usable products” from the definition of edibles. Shape, form, potency and, in certain cases, the ingredients that may be included are also strictly regulated. For example, chocolates may not include toppings or extra ingredients, such as caramel, fruit, or nuts. Finally, companies seeking to manufacture or sell THC or CBD edibles must also obtain an annual food permit. Companies should review these regulations prior to making decisions about future product lines to ensure that the form and content of each are compliant.

In addition to the form and contents of the edible products themselves, Florida’s emergency regulations also impose strict requirements on labeling and packaging, which are designed to keep edibles from reaching children. Edible packaging cannot have primary or bright colors, must not resemble any commercially available candy, and must be child-resistant. And if a product is a multi-serving edible, the package must be manufactured such that it continues to be child-resistant after each use. The regulations also list several required statements and symbols that must be included on the label. The packaging and edible both must have the universal THC symbol, and while the packaging may include instructions and health warnings, it cannot include unsubstantiated claims that the edible cures any medical conditions.

Although Florida’s emergency edibles regulations appear daunting, they are largely consistent with those imposed in other adult-use states. Colorado, Washington, and California, among others, have implemented similar rules concerning potency, labeling, and packaging that also focus on preventing cannabis from falling into the hands of children. Despite the presence of nuanced and detailed regulatory schemes, edibles sales in Colorado, Washington, and California continue to increase. Should Florida’s short-term edibles sales show similar promise—without widespread regulatory and compliance issues from participants—the appetite for future edibles sales will only gain momentum.

But, as the edibles market continues to grow, edibles manufacturers should expect the regulations to evolve as well. In some states, this evolution has not been without challenges. Shortly after California implemented its permanent cannabis regulations, manufacturers and regulators became aware of a conflict between two of the three regulatory agencies overseeing California’s cannabis industry and edibles potency limits. Unfortunately, the discrepancy between the two schemes led to several products unexpectedly failing compliance certification. Fear over losing investment and development costs if their product unexpectedly failed led to several companies pausing product rollouts and left regulators scrambling to fix the issue. Florida cannabis manufacturers looking to enter the edibles market in the future should remain nimble, as the ability to adjust quickly to the rapidly evolving regulations will help avoid pitfalls down the line.

But while Florida cannabis companies have reason to be excited over the new rules, the federal position on cannabis-infused food products still looms in the background. While the majority of states have legalized some form of cannabis use, the FDA’s position is clear—infusing food products with THC or CBD is illegal under federal law. And while the federal government’s enforcement position towards marijuana remains a gray area, some companies making CBD edibles have already found themselves in hot water with the FDA. Within the last few years, the FDA has issued warning letters to several CBD edibles companies concerning troubling statements on labels, company websites, and other customer-facing communications. Some of the issues identified in these letters include:

• Statements marketing products as a “dietary supplement” (i.e., including a Supplemental Facts panel on the packaging)
• Statements marketing “proven benefits” of CBD “to cure, mitigate, treat, prevent a disease and/or affect the structure or any function of the body” (i.e., “relieves pain and inflammation,” “remarkable safety profile,” fighting cancer, and “lowers incidence of diabetes”)
• Inappropriately marketing products without adequate instructions for use (“misbranded drugs”)
• Promoting products as if they are conventional foods, such as “CBD organic gummy bears,” “CBD infused caramels,” and “CBD watermelon rings”
• Inappropriately marketing products as safe for animal consumption, both as a conventional food and as a drug

Entering the cannabis market is not without litigation concerns, and those concerns should not be limited to potentially problematic statements on labels. Recently, CBD and THC companies have faced a variety of claims as the market continues to expand.  Class actions and individual suits are already underway over the advertised potency of CBD and THC products, and more traditional product liability claims under failure to warn and manufacturing defect theories have also started to surface. As profits continue to blossom nationwide, clever plaintiffs’ lawyers will continue to seek novel avenues to take a cut of the cannabis market.

The edibles market is growing in Florida. As of August 2020, there were 400,000 patients enrolled in Florida’s Medical Marijuana Register. Companies that invest appropriate time and attention into understanding the fluid regulatory scheme in not only Florida but also other adult-use states will position themselves well to reap the benefits of this rapidly blossoming market.

About the Authors

Matt Bernstein is an experienced litigator and represents companies in all phases of litigation. He has experience litigating a wide range of matters, including complex product liability cases involving wrongful death and significant personal injury, and complex commercial disputes including contract breaches, deceptive and unfair trade practices and trade secret actions. Matt litigates in both state and federal court in Florida and nationally.