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CBD Regulation: The Food & Beverage Industry Must Join the Food Fight

Association of Corporate Counsel

Publication
Summer 2019 Edition

The CBD Craze Is Full Steam Ahead

CBD (cannabidiol) is the new must-have product. It is difficult to go shopping these days without encountering a CBD offering--whether it be oils, skin lotions, supplements, or drops. The financial success of the industry is equally staggering. The US hemp-derived CBD market is predicted to reach over $5 billion by the end of this year, and $23 billion by 2023.1

The food industry is also riding the CBD wave. CBD making its way into everything from coffee to cupcakes.2 And in celebration of National Weed Day, fast food chain Carl's Jr. offered a "Rocky Mountain High" burger infused with CBD oil. An inside source reported to have sold 2,200 burgers by 4pm. Shortly after, Oreo maker Mondelez announced it was considering rolling out CBD snacking options.3

Federal Regulations Are Far Behind
The wide-spread popularity of CBD is due to its perceived "win win" set of attributes-relaxing properties without the mind- altering side effects of marijuana. But the rocket-fast trajectory of CBD is equally attributable to an undeniable consumer misperception. The presence of largely unregulated CBD products at retail-coupled with steady state legalization of marijuana--leads many to believe that CBD is legal and safe for consumption.

But the CBD legal landscape is far more complex and uncertain. For decades, hemp was classified as a Schedule I substance under federal law. That changed in December 2018, with the signing of the Agricultural Improvement Act (2018 Farm Bill) that declassified hemp as a Schedule I substance and legalized hemp-derived CBD under federal law.

What is often missed over, however, is The FDA has made clear that adding CBD to food remains federally illegal. This is difficult to reconcile with the fact that (i) CBD is sold nationwide in the form of supplements, lotions, oils and drops; and (ii) edibles containing marijuana are sold legally in states like Colorado and California.

In view of the legal uncertainties and contradictions, CBD stakeholders are anything but relaxed. For those whose livelihood depends on CBD, going to work carries the risk of committing a federal crime. Those who rely on CBD to treat ailments are left to make a similar impossible choice.

The nation's major food and beverage manufacturers are also eager to receive the legal go-ahead to enter into the burgeoning CBD market. Mondelez's CEO Dirk Van de Put confirmed that they are "getting ready, but we obviously want to stay within what is legal and play it the right way. . . . I'm hoping that the FDA will bring some clarity in the coming months."4

The FDA Hearing

In response to growing public demand for guidance, the FDA held a highly-anticipated public hearing on May 31. While billed as the first meaningful step toward federal legalization of CBD in food, the hearing raised more questions than answers.

The FDA posed a litany of basic public health concerns regarding CBD. What amount can be consumed safely daily? Annually? Over 10 years? Can CBD inter- act with medications? What are the effects on children? On pregnant women? What level of THC is safe?

The silence that met these inquires was deafening. Striking absent from the ten hours of presentations from constituent groups--ranging from academia, agriculture, consumers, health professionals, manufacturers, and patients--was any meaningful citation to scientific research on the health effects of CBD.

The hearing participants' inability to respond to regulators' concerns is not surprising. Save for a handful of state- authorized industrial hemp research pilot programs5 and specific advancements related to a cannabis-derived drug used to treat rare forms of epilepsy, little has been done in the way of CBD research.

Big Food Is Poised to Shape the Debate


To green light something as radical as the use of CBD in the nation's food supply, the FDA must be armed with far more than anecdotes attesting to CBD's healing properties, and the word of cannabis entrepreneurs with the most skin in the game. Concrete and verifiable scientific data on how CBD affects the human body is needed.

This creates a unique opportunity for the food industry to shape the regulatory conversation. Industry heavyweights have already jumped into the fray to create momentum around legalization. On the eve of the FDA hearing, for example, Ben & Jerry's strategically announced its intentions to roll out a CBD-infused ice cream.6

But if Big Food wants to cause meaningful and swift change, it must do more than talk about its future plans if and when legalization comes to pass. To pull CBD over its greatest hurdle--the perceived health risks of ingestion--Big Food must support CBD research and development initiatives.

Scientific backup is the missing foundation for comprehensive legalization of CBD in food. Much of the regulatory framework (i.e. manufacturing, marketing, and labeling), can be borrowed from state regulations of marijuana and CBD. Indiana and Florida for example, passed legislation requiring CBD product packaging to include a scanable bar code allowing tracing to product origin, an expiration date, the number of milligrams of low-THC hemp extract included, and a statement that the product contains no more than three-tenths of a milligram of THC.7 Oregon has similar statutory requirements.8

With the CBD movement in full swing, a confused customer base, and an FDA in the midst of playing catch-up, the U.S. food industry must set the table for CBD reform by obtaining the scientific proof necessary to satisfy well-founded public health and safety concerns.

*Republished with authorization from the Association of Corporate Council. 


 

 

 1 Bruce Jaspen, CVS, Walgreens to Lead $23 Billion CBD Market by 2023, FORBES (Jul. 11, 2019, 8:00 AM), https://www.forbes.com/sites/brucejapsen/2019/07/11/cvs-walgreens-to-lead-23-billion-cbd-market-by-2023/#2c674f9f52ca.  
2 Thomas Mitchell, Carl's Jr. Might Have Sold Over 2,000 CBD Burgers in Denver on 4/20, WESTWORD, (Apr. 27, 2019, 7:07 AM),
https://www.westword.com/marijuana/carls-jr-in-denver-may-have-sold-over-2000-cbd-burgers-on-4-20-11323158.
3 Amerlia Lucas, Cannabis Fans Everywhere May Get Their Wish as Oreo-Maker Mondelez Eyes CBD-Infused Snacks., CNBC (May 1, 2019, 11:25 AM),
https://www.cnbc.com/2019/05/01/cannabis-fans-may-get-wish-as-oreo-maker-mondelez-eyes-cbd-snacks.html.

4 Eric Schroeder, Consideration for C.B.D., FOOD BUSINESS NEWS (May 3, 2019), https://www.foodbusinessnews.net/articles/13729-consideration-for-cbd.

5In 2017, Arkansas, Colorado, Florida, Hawaii, North Dakota, Nevada, New York, Oregon, South Carolina, Tennessee, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, authorized these programs. In 2018, another six states, including Alaska, Kansas, Missouri, New Jersey, and Oklahoma, followed this trend. See State Industrial Hemp Statutes, NATIONAL CONFERENCE OF STATE LEGISLATURES, http://www.ncsl.org/research/agriculture-and-rural-development/state-industrial-hemp-statutes.aspx (Feb. 1, 2019).  

6 CBD Ice Cream Is (Maybe, Hopefully) Coming To A Freezer Near You!, BEN & JERRY'S (May 30, 2019), https://www.benjerry.com/whats-new/2019/05/cbd-statement.

7 S.B. 52, 120th Gen. Assemb., 2d Spec. Sess. (Ind. 2018), S.B. 1020, 121st Leg., Reg. Sess. (Fla. 2019). Utah has similar regulations to that of Indiana and Florida. R68-26-5.

8 Oregon requires labels to include a hemp symbol, the potency value, a statement of the concentration of THC and CBD in the product, and a warning that the product is “[f]or use only by adults 21 and older. Keep out of reach of children.” OAR 845-025-7030


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