<<

Hemp Cannabinoid Regulation After The 2018 Farm Bill

August 26, 2021 Agenda > Overview of the 2018 Farm Bill > Current Regulatory Enforcement by the FDA and FTC > Hot Topics in State Compliance > Registration > Labeling Cover option 2 > Specific Prohibitions Subtitle or Company Name > New York Month Day, Year > Delta-8 THC  Please ask questions throughout the program using the Q&A feature. Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 2 2018 Farm Bill

. Agriculture Improvement Act of 2018 (the “Farm Bill”). • Legalized and hemp derived products. • Created regulatory framework at both federal and state level. • Carved out hemp from definition of “marihuana” under the Controlled Substances Act.

. Primary Regulatory Authority. • Split between and among: oUnited States Department of Agriculture (“USDA”). oState Departments of Agriculture. oIndian tribes.

. Preserved Ancillary Federal Oversight. • Expressly recognized continued oversight of: oFood and Drug Administration (“FDA”); oDepartment of Health and Human Services (“HHS”).

© 20152021 Foley Hoag LLP. All Rights Reserved. 3 2018 Farm Bill

. Removal from CSA and Purview of Regulatory Oversight. • Regulatory framework all boils down to the carveout for, and definition of, hemp. • Hemp defined under the Farm Bill as: othe plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, , and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis. • What is a hemp derivative? • What is a hemp extract? • What is a hemp cannabinoid? • What is a hemp isomer? • What is a hemp acid? • What is a hemp ? • What is a salt of isomers?

. Hemp derivatives seemingly broadly defined – but – continued jurisdiction of other federal agencies.

© 20152021 Foley Hoag LLP. All Rights Reserved. 4 2018 Farm Bill

. USDA – Primary Regulatory Authority • USDA has created, and states may adopt, default hemp production plans. • USDA may approve State proposed hemp regulatory plans. • State’s plan to license and regulate hemp can only commence once the Secertary of USDA approves.

. Preemption • Farm Bill makes clear that federal law does not preempt state law adopted and approved by the USDA governing hemp. • “Nothing in this section preempts or limits any law of a State or Indian tribe that . . . Regulates the production of hemp; and . . . Is more stringent than this subtitle.”

© 20152021 Foley Hoag LLP. All Rights Reserved. 5 2018 Farm Bill

. State Regulatory Authorities • As of early summer, USDA approved 23 state hemp plans. • 3 remained under USDA review. • 20 continued to operate under legacy hemp programs previously approved under the 2014 Farm Bill (which will sunset at the end of 2021). • 3 States had adopted USDA hemp producer rules. • ALL 50 STATES HAVE APPROVED SOME STATE LEVEL HEMP LAW . of State Regulation • Certain states require hemp cannabinoid product registration as a condition precedent to sales. • Fewer states even still require licensure to both distribute hemp cannabinoid products (B2B) and products (B2C), even if seller never steps foot inside the individual state. • Majority of states have minimal regulation on sales and products, but larger states are beginning to take notice, and air on the side of regulating. . Distinguishing Between and Among State Authorities • States vs. Regulation vs. Subregulatory Guidance

© 20152021 Foley Hoag LLP. All Rights Reserved. 6 2018 Farm Bill

. Examples of State Regulation • Alaska: oOperating under legacy 2014 Farm Bill approvals. oRegulates cultivation through retail sales. oRequires product endorsement as condition precedents for sale. oLabeling rules and requirements.

• California: o2018 Farm Bill program still under USDA review. oCalifornia Department of Health guidance indicating that CBD is not permitted as a additive. oCalifornia Department of Food and Agriculture directs businesses to contact local officials for clarity on permissibility of introduction of hemp CBD into food. oBill pending that would expressly legalize CBD as an additive.

• Florida: oRobust and retail rules for in-state actors, but not out-of-state actors.

© 20152021 Foley Hoag LLP. All Rights Reserved. 7 2018 Farm Bill

. Examples of State Regulation (continued) • New Jersey: oFirst 2018 Farm Bill approved program. oBroadly defines “hemp product” to include food products intended for human consumption. oNo regulatory oversight for either post-extracted hemp-cil or retail sales.

• New York: oContinues under legacy 2014 Farm Bill program. oRobust regulatory oversight under the New York Department of Health, and soon the Cannabis Control Board. oLicensing for both in-state and out-of-state actors.

© 20152021 Foley Hoag LLP. All Rights Reserved. 8 Agenda > Overview of the 2018 Farm Bill > Current Regulatory Enforcement by the FDA and FTC > Hot Topics in State Compliance > Registration > Labeling Cover option 2 > Specific Prohibitions Subtitle or Company Name > New York Month Day, Year > Delta-8 THC  Please ask questions throughout the program using the Q&A feature. Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 9 FDA Regulation and Enforcement

. Congress preserved the FDA’s authority to . Examples of claims regulate products containing cannabis or - “Increasing evidence suggests that CBD oil is a cannabis-derived products under the Federal powerful option for pain . . . anxiety . . . and autism Food, Drug, and Cosmetic Act (FDCA). . . . It seems like an attractive and option for . The FDCA prohibits the introduction or delivery for children.” introduction into interstate commerce any - “CBD oil may have neuroprotective properties and adulterated or misbranded food, drug, medical may protect against neurological conditions, such device, dietary supplement, cosmetic, or tobacco as Parkinson’s and Alzheimer’s disease.” product. - “[P]ossible uses for CBD include helping with skin problems such as acne, autism, ADHD, and even New drugs may not be introduced or delivered for . cancer.” introduction into interstate commerce without an approved new drug application or approved over- - “Relieves headaches” the-counter (OTC) monograph. - “Relieves sinus pressure” - Depends largely on its intended use - “Reduces the risk of osteoporosis and osteoarthritis.” FDA has issued several warning letters to . - “May Help Improve Cholesterol and Decrease the manufacturers and retailers to cease making Risk of Cardiovascular Diseases” statements that CBD products can be helpful in treatment or curing diseases.

© 20152021 Foley Hoag LLP. All Rights Reserved. 10 FDA Enforcement

. Types of violations • Unapproved new drug oIntended for the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body • Misbranded drug oLabeling fails to bear adequate directions for use • Dietary supplement oExcluded from the definition of dietary supplement - CBD and THC are active in FDA approved drugs and/or were the subject of substantial clinical investigations before being marketed as or dietary supplements oNew dietary application rejected • Adulterated food oCBD and THC are unapproved food additives oGenerally Recognized as Safe (GRAS): hulled hemp seeds, hemp seed protein, & hemp seed oil

© 20152021 Foley Hoag LLP. All Rights Reserved. 11 FDA Regulation - Epidiolex

EPIDIOLEX is indicated for the treatment of seizures associated with Lennox-Gastaut syndrome, Dravet syndrome, or tuberous sclerosis complex in patients 1 year of age and older

© 20152021 Foley Hoag LLP. All Rights Reserved. 12 FDA Regulation and Enforcement

. FDA issued a draft guidance “Encouraging Cannabis-Related Clinical Research” – to support the development of drugs that contain cannabis or cannabis-derived compounds.

. Working to evaluate “potential lawful pathways” for the marketing of CBD.

. FDA will take action in consult with federal and state partners “where necessary to protect the public health” • Protect against unsubstantiated medical claims • Concern about products marketed for infants and children, pregnant, breastfeeding • Concern about products with contaminants such as heavy metals, THC, or other potentially harmful substances

. FDA warns consumers about potential harm and side-effects, including liver injury, contraindications with other medicines, use of CBD with alcohol, toxicity, and long-term use.

. FDA is evaluating the issuance of a “risk-based enforcement policy”. • CBD Enforcement Policy Draft Guidance was under review by Office of Management and Budget but was withdrawn in January 2021. Has not since appeared on the regulatory agenda.

© 20152021 Foley Hoag LLP. All Rights Reserved. 13 FTC Regulations and Guidance

. Broad mandate to protect against unfair and deceptive practices as well as the making of false advertisements

. Standard for health claims is competent and reliable scientific evidence, including well-controlled human clinical studies, substantiating that the claims are true at the time they are made

. Enforces against claims about products already on the market

. FTC enforcement against unfair and deceptive acts - False and misleading advertisements and mislabeling - includes blog and social media posts - Unsubstantiated medical claims - Operation CBDeceit - Consent Orders . Joint FDA/FTC actions

. Good way to attract attention? Market as a Covid cure

© 20152021 Foley Hoag LLP. All Rights Reserved. 14 Agenda > Overview of the 2018 Farm Bill > Current Regulatory Enforcement by the FDA and FTC > Hot Topics in State Compliance > Registration > Labeling Cover option 2 > Specific Prohibitions Subtitle or Company Name > New York Month Day, Year > Delta-8 THC  Please ask questions throughout the program using the Q&A feature. Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 15 Registration Requirements

. Registration requirements vary by state • Most states require cultivators/processors/manufacturers of hemp products to obtain licenses or otherwise register with state regulators • Far fewer require retailers of hemp products to obtain licenses – those states include: oAlaska oFlorida oLouisiana oMaine (if the retailed product is intended for human consumption) oMichigan oNew York oTexas oUtah

. Registration requirements do not distinguish between brick and mortar retailers and online only retailers

© 20152021 Foley Hoag LLP. All Rights Reserved. 16 Labeling Requirements

. About half of the states impose specific labeling requirements for hemp derived CBD products • The most common requirements across all states include: oBatch/Lot Number oExpiration Date oIdentification of cannabinoid concentration in milligrams/percentage of total product weight oServing Size/Recommended Dosage oScannable Barcode or QR Code to Certificate of Analysis for the Product oProhibitions against medical claims oWarnings that product has not been analyzed or approved by FDA oManufacturer information

. Inconsistent approaches makes strict compliance across multiple states difficult: • Colorado: “FDA has not evaluated this product for safety or efficacy.” • New Mexico: “FDA has not evaluated this product for safety, effectiveness, and quality.”

© 20152021 Foley Hoag LLP. All Rights Reserved. 17 Specific Prohibitions

. States have implemented regulations banning sales of certain types of Hemp derived CBD Products • Food Products: oGeorgia, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Washington

• Smokeable Products oFlorida (U21), Indiana, Iowa, Kansas, Kentucky, Louisiana, Texas

. Prohibition on medical/health benefit claims mirrors Federal FDA approach • Express prohibitions on medical/health benefit claims in state hemp regulations • State consumer protection laws

© 20152021 Foley Hoag LLP. All Rights Reserved. 18 Agenda >Overview of the 2018 Farm Bill >Current Regulatory Enforcement by the FDA and FTC >Hot Topics in State Compliance >Registration Cover option 2 >Labeling >Specific Prohibitions Subtitle or Company Name

>New York Month Day, Year >Delta-8 THC

 Please ask questions throughout the program using the Q&A feature. Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 19 New York CBD Regulations

. New York seems to have taken the lead on licensing • To sell hemp cannabinoid products both online and in-person businesses need a license

. Applications must include • a summary and description of the type of cannabinoid hemp products the applicant intends to sell • the sources of the cannabinoid hemp products from whom the applicant intends to purchase, including the name and contact information of any manufacturer or distributor • proof that the applicant is registered to collect sales tax in New York State • an attestation that the applicant will comply with the rules and regulations of the Program. • Must also pay a $300 licensing fee

. Other states such as Connecticut are following suit

© 20152021 Foley Hoag LLP. All Rights Reserved. 20 Agenda > Overview of the 2018 Farm Bill > Current Regulatory Enforcement by the FDA and FTC > Hot Topics in State Compliance > Registration > Labeling Cover option 2 > Specific Prohibitions Subtitle or Company Name > New York Month Day, Year > Delta-8 THC  Please ask questions throughout the program using the Q&A feature. Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 21 Delta-8 THC

© 20152020 Foley Hoag LLP. All Rights Reserved. 22 Delta-8 THC

. An Unintended Byproduct • Delta-8 is a naturally occurring cannabinoid o Isomer of Delta-9 THC  75% of the potency o Found in extremely small concentrations in hemp  But using an acid heat treatment on CBD can create Delta-8 THC

• Listed as a Schedule 1 controlled substance

• Sold nationwide as a “legal” high alternative o Proponents claim all hemp derived cannabinoids were legalized by the Farm Bill

. Is there a Loophole? • Synthetically derived controlled substances are not legal o The US Cannabis Council argues that the Farm Bill does not legalize the production of Delta-8 THC simply because the material has been extracted from hemp

• Potentially a “controlled substance analogue” under the Federal Analogue Act o Both substantially similar in chemical structure and hallucinogenic effects

© 20152021 Foley Hoag LLP. All Rights Reserved. 23 Delta-8 THC

. Delta-8 THC. • Farm Bill Intent – legalized product with non-psychoactive properties. • DEA IFR - • Federal Analogue Act. • State Prohibitions. • Colorado, Illinois, Iowa, Kentucky, Massachusetts, Nevada, New York, North Carolina, North Dakota, Vermont, and Washington. • USCC Report – Consumer Safety and Misrepresentations.

© 20152021 Foley Hoag LLP. All Rights Reserved. 24 State Enforcement

. States are starting to crack down on Delta-8 products • 16 states so far have blocked the sale of Delta-8 oAlaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Idaho, Iowa, Kentucky, Mississippi, Montana, New York, North Dakota, Rhode Island, Utah, and Vermont • Pending Legislation oLouisiana, Michigan, Nevada, and Oregon • Some states are expanding the definition of marijuana to include Delta-8 • In some states, you can’t sell products that are synthetic or made through isomerization • in some states, dealers must be licensed and regulated

. The trend now seems to be leaning towards having regulators for hemp related isomers

. State AGs have the power to ban Delta-8 products • Power under the Consumer Protection Acts and UDAP

© 20152021 Foley Hoag LLP. All Rights Reserved. 25 State Enforcement

. There has been some pushback in the Delta-8 market

• Texas failed to pass legislation to make Delta-8 product illegal

• Florida seems to allow Delta-8 products as long as they comply with Florida law

oFlorida allows products containing any amount of Delta-8 to be sold so long as THC-A and Delta-9 remain under .3%

© 20152021 Foley Hoag LLP. All Rights Reserved. 26 QUESTIONS? Cover option 2 Subtitle or Company Name

Month Day, Year

Proposal or event name (optional) © 20152021 Foley Hoag LLP. All Rights Reserved. 27 Speakers

Michael McQueeny, Counsel Tina Papagiannopoulos, Associate Stephen Bartlett, Associate

646.927.5502 202-261-7344 617-832-3007 [email protected] [email protected] [email protected]

Be sure to check out our blog! https://www.cannabisandthelaw.com/

© 20152021 Foley Hoag LLP. All Rights Reserved. 28