Last week (2.22.2019), the Food and Drug Protection Division of the North Carolina Department of Agriculture and Consumer Services (DACS) indicated that it would begin issuing warning letters, urging purveyors of CBD products to cease selling certain prohibited products. In a recent interview with Carolina Cannabis NewsCommissioner Reardon set forth his agency’s position and the reasons it decided to take action, which include a concern about substandard manufacturing practices for CBD products in the state.

To better frame the explanation that follows, think of DACS as the state equivalent of the federal Food and Drug Administration (FDA). At the federal level, congress passes laws, and the FDA updates its regulation of food and drugs to reflect the statutory changes. In theory, this mechanism works the same way at the state level. A state regulatory agency, such as DACS, will also tend to model its policies on positions at the federal level as they change. In short, state agencies are routinely updating internal policy based on developments at the federal level.

The NC warning letter reiterates longstanding FDA policy prohibiting the addition of CBD isolate to ingestible products and against labeling products containing CBD as “dietary supplements”. The timing of these letters is likely linked to a Statement issued by FDA commissioner Scott Gottlieb on the same day that the 2018 Farm Bill was passed. While the Statement did not change any substantive policy in within the FDA, it did acknowledge the need to review these policies in light of the 2018 Farm Bill, and a willingness to reconsider its stance on CBD. For the meantime however, the FDA merely reiterated and confirmed existing policies, with Commissioner Gottlieb stating:

“…it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”

The Statement cites 21 U.S.C. 331 (ll) , which lists as a prohibited act “the introduction or delivery for introduction into interstate commerce…a drug or a biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, unless-

  • such drug or such biological product was marketed in food before any approval of the drug under section 355 of this title, before licensure of the biological product under such section 262 of title 42, and before any substantial clinical investigations involving the drug or the biological product have been instituted;

 The FDA invokes this section based on the Investigative New Drug Application (INDA) initiated for Epidiolex, an anti-seizure medication recently approved by the FDA to treat rare forms of epilepsy. Epidiolex contains CBD isolate (chemically isolated CBD concentrate) derived from marijuana. Epidiolex (and as a corollary, all CBD isolate) can be differentiated from full-spectrum extracts of hemp. Full-spectrum hemp extracts include the full range of phytonutrients, cannabinoids, and terpenes present in the hemp plant. It is not an isolated compound intended for medical use or other therapeutic application. Most importantly, it has been available for public use and as a food ingredient prior to the initiation of an INDA. This is important because substances that were “marketed as” a dietary supplement or as a conventional food before the drug was approved or before the new drug investigations were authorized are excepted from this restriction. We have discussed the legal distinctions between CBD isolate and hemp extract in this blog post.

The European Industrial Hemp Association (EIHA) recognizes the distinction between full-spectrum hemp extract, and CBD isolate, arguing in a January 15, 2019 statement on food status of hemp extracts that hemp and hemp extracts have been part of the food system for thousands of years:

“With such an extensive and documented use of hemp across Europe since the middle-ages, it would be disingenuous to argue that most parts of the hemp plant have not been used as food or in food.”

The EIHA press release also cited to a 2018 World Health Organization (WHO) reporton CBD, which indicated that CBD was non-psychoactive, had no reported cases of abuse or dependence, and does not present any potential harmful effects.

Other US states have taken similar action, threatening to remove articles containing from retail shelves. Notably, California has for a long time indicated that the addition of CBD to food products is prohibited. New York has also begun to crackdown on CBD in ingestible products.

The upshot of all this generally, and in North Carolina specifically, is that there is strong legal precedent that businesses may continue to sell products containing full-spectrum hemp extract derived from lawful hemp. Additionally, it appears that NC is primarily focused on health claims. In an “educational” letter to sellers of CBD products in NC, the DACS states:

CBD in products other than the approved drug Epidiolex and which makes health claims would be a new drug that cannot be legally introduced into interstate commerce.

We read this as requiring two elements for a CBD product to be in violation of the NC position: (1) CBD in products other than Epidiolex, and (2) that make health claims. Every CBD product in NC meets element one, but very few meet element two.

This issue in North Carolina and throughout the USA is evolving rapidly. We are watching and responding in real time.

February 22, 2019

This post was written by Kight on Cannabis attorney Kamran Aryah. Kamran works closely with clients to develop compliance strategies in the hemp and CBD industry. Kight on Cannabis is a law firm founded by attorney Rod Kight that represents legal cannabis businesses. You can contact us by clicking here.