Hemp and Hemp-Derived CBD 

Weekly Inside U.S. Hemp, Issue #3

From the Greenspoon Marder Washington D.C. Office

Greenspoon Marder has an expanded Washington D.C. presence and experience in the hemp and hemp-derived products space. We will be reporting frequently on federal regulatory and Hill developments for hemp and hemp-derived CBD.

In Washington D.C., Jessica Wasserman of Greenspoon Marder and Saphira Galoob of The Liaison Group – a wholly-owned subsidiary of the firm – are speaking with the officials at the federal agencies, the Food and Drug Administration, the US Department of Commerce, Customs and Congress on an ongoing basis seeking clarification of the issues surrounding the implementation of the hemp provisions of the 2018 Farm Bill.

In this regular blog, we will share our insights and analysis as eyes and ears in Washington.

Below is some of the information we have gathered this week.

The key implementing agency for hemp as set out in the 2018 Farm Bill statute is the US Department of Agriculture. This week we learned the following:

  • On February 27, USDA issued an online announcement which clarified the time line for implementation of the state and federal hemp programs pursuant to the 2018 Farm Bill mandate. In short, USDA’s intention is to have the federal regulations final and the state plan approval process in place by the 2020 growing season or not until around March 2020. USDA clarified that it would not review and clear state plans until after USDA issues its default plan federal regulation in 2020. Until USDA issues its final rule and approves state plans, the 2014 Farm Bill program remains in effect. https://www.ams.usda.gov/content/hemp-production-program
  • USDA has announced a webinar style listening session for March 13, 2019 open to the public, with more details forthcoming.

For hemp food products, dietary supplements, cosmetics, and medical devices, Food and Drug Administration regulatory pathways will be critical for the growth of the emerging hemp-derived products industry, including the CBD industry.

  • On February 27, Commissioner Gottlieb testified in Congress before a House Appropriations Subcommittee at a hearing on FDA Operations, and Congressman Pocan (D-WI) asked a significant question on hemp. Commissioner Gottlieb foreshadowed that a way forward might be that high concentration CBD be regulated as a drug and that a lower concentration might be allowed for food and supplements. The Commissioner indicated that FDA would discuss this with Congress before going forward if the regulatory pathway became “too complicated,” seeming to indicate that FDA might prefer to bounce this issue back to Congress for additional legislation some time in the future.
  • Congresswoman Pingree (D-ME) followed up with another CBD question for Commissioner Gottlieb. The Commissioner stated that the agency is “deeply committed” to focus on and resolve the confusion around CBD regulation. Gottlieb will announce a high level working group and an April public hearing. If it appears that the FDA process will be multiyear, FDA will look for a quicker solution that perhaps would require additional CBD-specific legislation in order to reach a possible dose-based solution.
  • Congresswoman Lee (D-CA) asked Commissioner Gottlieb about restriction in the US on cannabis research and how this has pushed research to the UK, for example for GW Pharmaceuticals research leading to Epidiolex approval. Gottlieb admitted that this was a problem and seemed to indicate that US research on hemp-derived products would now be allowed and that the Commissioner supports the changing environment toward allowing new broader cannabis research as well.
  • On February 26, FDA Commissioner Gottlieb addressed the annual National Association of Departments of Agriculture (NASDA) conference and commented on “the regulatory framework for products derived from cannabis.” Referencing the 2018 Farm Bill hemp provisions, Gottlieb expressed concerns about “unproven claims of therapeutic benefit” and that FDA would continue to “warn consumers and take enforcement action” with regard to these claims. Lumping THC and CBD together, Gottlieb stated that introducing these into interstate commerce or marketing as a dietary supplement is unlawful. He went on to say that this will change for CBD only if FDA issues a regulation to permit marketing of CBD.
  • Gottlieb went on to say that FDA is planning to consider a new regulation allowing marketing of CBD, taking into account the science and safety behind CBD, but that the process will take time. (Based on past experience, our guess is that this process could take more than five years and drag out even longer unless Congress intervenes and gives FDA a deadline for issuing the regulation). Perhaps to deter Congress, Gottlieb offered that for the interim period, “we are interested in hearing from stakeholders and talking to Congress on possible alternative approaches.” Gottlieb gave no hint as to what these alternative approaches might be.
  • Gottlieb also pointed out that companies can seek drug approval for products derived from cannabis, and he highlighted Epidiolex.
  • Our takeaway: In his remarks, Gottlieb signaled that FDA would prefer to maintain the status quo on CBD: in other words, the only pathway available is drug approval. At the same time, his mention of Congress and interim solutions shows that FDA is feeling the pressure from Congress to develop an alternative pathway for CBD. It may be that this pathway will emerge only if Congress legislatively mandates that FDA move forward on a regulation and gives FDA a deadline and some additional CBD-specific mandate.

The enforcement of the rules for import and export of hemp and hemp derived products is administered by the Department of Homeland Security, Customs and Border Protection (CBP)

  • We have been in contact with DEA and CBP in an attempt to further clarify how imports of hemp-derived products will be treated. DEA confirmed that its role for hemp-derived products at the border has been virtually eliminated as of 1/1/19 by the 2018 Farm Bill. DEA will no longer consider hemp-derived products as triggering THC rules.
  • CBP continues to review its border policy for hemp-derived products, and appears to be moving toward announcing a recognition of the 2018 Farm Bill. Insofar as neither DEA nor FDA are enforcing against hemp-derived products in the US domestic market, US treaty obligations require that imports be given equivalent treatment. We are now expecting some clarification from CBP as soon as next week.
  • Whenever there is a change of instructions that comes from CBP headquarter to the field at the various ports of entry, it takes a number of months and longer before the policy is fully communicated to the officials clearing shipments a the ports. We predict that for a period of time, some port officials will stop hemp shipments based on the outdated policy. If your shipment is held at customs, we urge you to contact us to assist you to have it released. We have a record of successfully working with CBP to quickly release shipments.