CBD Regulation: Not Much Progress in 2021

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CBD Regulation: Not Much Progress in 2021

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William P. Ziegelmueller

The FDA’s position that the Food, Drug, and Cosmetic Act (FDCA) prohibits Cannabidiol (CBD) from being sold in interstate commerce as a dietary supplement or food ingredient makes national companies hesitant to sell products containing CBD or do business with the CBD industry. Observers had hoped that the Biden Administration would develop new regulations that would expressly allow CBD as a dietary supplement and open the door for an interstate CBD industry. However, it appears there will be little progress made toward that goal in 2021. In the meantime, states continue to develop a patchwork system of regulations, while Congress has introduced legislation that would authorize CBD as a dietary supplement.

1.  No progress in the Executive Branch.

Neither the Biden White House nor the FDA has publicly acknowledged progress towards federal CBD regulation. The FDA submitted nonpublic draft guidance in the final days of the Trump Administration, but President Biden withdrew all pending agency rules immediately upon taking office, including the proposed CBD guidance. Nothing has been released since that withdrawal.

Furthermore, the FDA lacks permanent leaders in key positions affecting CBD regulation. President Biden has not nominated a permanent FDA commissioner. Though the President’s short list of potential commissioners appears updated as of April, he has not moved to fill the post. Dr. Amy Abernethy, who led the FDA’s CBD Working Group and spearheaded the agency’s CBD research and regulatory efforts, resigned in April.

2.  Federal legislation stalled.

Multiple bills in Congress would expressly authorize CBD as a dietary supplement and direct the FDA to develop labeling and marketing standards. Bills in the House and Senate both have bipartisan support, including H.R. 841, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021, and S.1698, the Hemp Access and Consumer Safety Act. Both bills have been referred to committee but have not yet been scheduled for a hearing.

A less likely route to CBD regulation is Majority Leader Schumer’s Cannabis Administration and Opportunity Act, which would fully legalize cannabis in addition to authorizing CBD as a dietary supplement. For now, that bill appears unlikely to progress, as leaders in both parties, along with President Biden, have expressed hesitancy toward legalized cannabis.

3.  Status quo in federal enforcement.

In the absence of an official change at the federal level, both the FTC and the FDA have continued their enforcement efforts against companies marketing CBD as a dietary supplement or containing health benefits. After settling with six companies in late 2020 as part of “Operation CBDeceit,” the FTC continued its enforcement efforts this year by settling its seventh CBD-related enforcement action for deceptive health and efficacy claims. Settlements ranged between $20,000 and $80,000. Additionally, the FDA issued two warning letters this year to companies engaging in similar behavior. These continued enforcement actions confirm that neither agency has softened its stance on CBD under President Biden.

4. States forge ahead.

States have continued to implement their own CBD and hemp-focused regulations and laws. Colorado, Iowa, and Kentucky established testing and/or labeling requirements for various CBD products. Montana and Rhode Island passed laws authorizing state agencies to develop regulations for hemp derivatives. Washington created a certification program for hemp extract. California, especially eager for progress, is currently considering legislation to expressly permit CBD as an additive to food and drink. Other states are hesitant to counter the FDA’s prohibition on CBD as a dietary supplement. For example, Michigan recently affirmed its deference to the FDA,  meaning the state will not allow CBD as an additive or health agent until the FDA authorizes it.

5) The other delta – delta 8.

The recently popularized “delta-8” cannabinoid also troubles state legislatures. Delta-8, a lab-produced derivative of the hemp plant, is similar to CBD but technically legal if a state has not regulated it. The substance has psychoactive properties like those of THC—the psychoactive component of marijuana—so some cannabis consumers have embraced delta-8 as a legal alternative to cannabis. In states where cannabis remains illegal, regulators are prohibiting the substance, citing its similarity to THC. However, even in states with legal cannabis, regulators are concerned that the new synthetic creation could have harmful health effects. As a result, 17 states have already banned or regulated delta-8, and four more are considering action.

Over the coming months we will be watching for any action by Congress or the FDA to set national standards for CBD. In the meantime, in the absence of federal standards, states will continue to develop a patchwork of legislation and regulation that will only make it more difficult for companies to do business across state lines and increase the need for federal action.