This blog post was written following a ReedTech webinar (dated 11.7.2019) which focused on helping companies understand how to navigate the state of Cannabidiol (CBD) regulatory environment. This post is for informative purposes only and to provide guidance to minimize risks when labeling, promoting and selling cannabis-derived products in the US.
To date, FDA has approved only one CBD drug product developed by GW Pharmaceuticals Inc called Epidiolex, that treats two rare, severe forms of epilepsy. Currently, FDA mandates it illegal to market any food or dietary supplement containing CBD. The FDA has reviewed only limited safety data regarding CBD, and the data that exists points to real risks that need to be considered before taking any CBD containing product.  Examples of these illegal combination products include: CBD-infused coffee, beer, and pet food. If health claims are made on the internet for any CBD products, FDA will consider it a new drug and the sponsor must follow an extensive regulatory process to develop and commercialize the CBD drug product in the US.
Before the 2018 Farm Bill was signed and implemented, both cannabis and hemp were treated as Class 1 illegal controlled substances under federal law. The 2018 Farm Bill ended the Hemp and CBD prohibition that had existed for decades and opened the door for CBD products and industrial hemp to compete on the US market across a wide range of products.
The key was how this bill defined the difference between cannabis and hemp, which relies on the psychoactive ingredient THC (or lack thereof). Any Hemp plant can only have a maximum concentration of .3% THC on a dry weight basis, ensuring no psychoactive properties can be transmitted in its use. Instead, hemp and CBD can be used for topicals, body care, construction, food, clothing and much more. Whereas Cannabis is characterized and valued for its high THC content (5-30%) and is for medical and recreational use depending on the state’s laws permitting its purchase, while remaining an illegal substance federally.
With the recent legalization of Hemp and CBD comes great opportunities as well as risks, and because of the complexity of the product and variety of intended uses there are many regulators and governmental stakeholders with overlapping and crossing authority. These include: The Department of Health and Human Services (HHS), the FDA, the DEA, the FTC, the USDA, State Governments as well as Congress and the rest of the Federal Government.
Because of the nature of the United States federal and state laws, there is a great variety of laws regarding both cannabis and hemp across the country. The resulting spectrum of what’s legal and allowed varies widely with different conditions and state regulations, leading to situations where a state such as Colorado or Alabama has permitted CBD to be included in foods or dietary supplements, going against the guidance of the FDA.
However, this has not slowed consumer acceptance, with the CBD Topicals market rising 180% in 2019 . Market Research from New Frontier Data, projects a $2.5Billion Dollar market for CBD related products by 2022, and around $15-20 Billion in expected US CBD sales in next 5-8 years.  Another indicator of the size of the market is that a search on Amazon shows over 30,000 CBD listings. To compound the issue of this flood of products, a Penn State Perelman school of Medicine study from 2017 found that 70% of online CBD cannabis extracts were mislabeled. 
This post will focus on the clear guidance and what has been defined by the FDA already and what can be inferred moving forward. As mentioned earlier, CBD (whether from marijuana or hemp) may not be sold as or in a dietary supplement or food in the United States. CBD in cosmetics/topical products is not restricted by FDA’s guidance on dietary supplements and food (but still subject to DEA restrictions); however, FDA has also not specifically allowed CBD/hemp in cosmetics. In addition, any unapproved CBD products have not been evaluated by the FDA to determine what the proper dosage is, cumulative exposure, how the compound could interact with other drugs or foods, or whether they have dangerous side effects or other safety concerns. The takeaway is that until the CBD industry receives an FDA pathway or official guidance, no medical claims can be made without an approved NDA drug application.
Some examples of the egregious claim’s companies are making (and have been sent warning letters for) include:
“shown to be effective in treating Parkinson’s disease”, “linked to the effective treatment of Alzheimer’s disease”, “a natural alternative to pharmaceutical-grade treatments for depression and anxiety”, “reduce the severity of opioid related withdrawal”, “counteract the growth and spread of cancer cells”, “CBD oil may improve depression, anxiety and PTSD”, “CBD may reduce risk of diabetes”.
Clearly these claims are unproven and false advertising, with companies using this period of undefined regulations and massive industry growth to take advantage of unsuspecting consumers. If a company claims to be curing or preventing, the product is a drug and must go through clinical testing, and regulatory approval to prove that it is safe and effective. If your product is a Dietary Supplement and you want to list the product, first, confirm with the Regulatory Counsel, follow FDA Dietary Supplement guidelines and then to list submit an electronic Structured Product Labeling (SPL) file either through the FDA online portal or through ReedTech. 
If you are firm in or planning on entering the CBD market in retail locations or online, be aware of the many risks which include: FDA/FTC Warning Letters that results in closer monitoring and will remain on the public record forever, Product Seizure, FTC Investigations/Consumer Litigation, as well as Industry reputation loss.
As a best practice in all businesses, have a strategy and plan in place, be proactive in terms of regulatory and legal compliance, not reactive. This includes following FDA Regulations, putting in place agreements with contract manufacturer (if applicable), ensuring quality ingredients and having a process for reviewing all products, claims and social media marketing. Furthermore, it is prudent to determine your companies’ level of risk with marketing CBD products now as well concurrently building up documentation to substantiate claims, dosages and ingredients.
In conclusion, with some understanding and planning the Hemp and CBD market remains a promising one as long as regulations are followed and due diligence performed. However, there are gaps that need to be addressed on the regulatory side that would greatly improve the situation, these include a new dietary ingredient pathway – FDA could require a new dietary ingredient notification for CBD (proven safety, GMP), as well as the potential that FDA or Congress could issue regulation or legislation to allow CBD in foods and dietary supplements.
- FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD). U.S. Food & Drug Administration. U.S. Food & Drug Administration. Updated 15 January 2020.
- CBD Summit 2019 – From Seed to Shelf: The Supply Side Story. Informa LLC. Presented by Claire Morton Reynolds.
- Labeling Accuracy of Cannabidiol Extracts Sold Online. JAMA Network. University of Pennsylvania Perelman School of Medicine, Veterans Affairs San Diego Health Care System, RTI international, Americans for Safe Access, Palo Alto University, John Hopkins University School of Medicine, Baltimore, Maryland. Research Letter Published 7 November 2017.
- Cannabis Companies Beginning to Ante Up for Bets on Hemp. Newfrontierdata.com Blog. Written 19 February 2019 by Chris Hudock.
- ReedTech webinar. ReedTech Webinar Presentation on CBD.