This decision follows the June 25 FDA approval of Epidiolex®, the first cannabis-derived drug, that we drafted an alert on here.

Epidiolex is formulated as an oral solution with purified CBD as the active ingredient is indicated for the treatment of two rare forms of epilepsy, Lennox-Gastaut and Dravet syndromes in patients two years of age and older.

While the actual schedule announcement appears in this more broad form, the Order took one of the most narrow possible scheduling interpretations that was necessitated by the approval of Epidiolex, namely only providing that the Epidiolex formulation and future generic versions would be schedule V, while leaving the bulk material cannabis used to make Epidiolex and any other CBD-containing product a schedule I drug.

Schedule V drugs have approved medical uses, a low potential for abuse relative to schedule IV drugs, and generally contain limited quantities of certain narcotics, typically used for antidiarrheal, antitussive, and analgesic purposes. Some examples of schedule V drugs are: cough preparations with less than 200 milligrams of codeine or per 100 milliliters (Robitussin® AC, Lomotil®, Motofen®, Lyrica®, and Parepectolin®). In contrast to schedule I drugs that have no medically-approved use or indication and are federally-banned substances, schedule V drugs may be prescribed by DEA-registered (or exempted) physicians, even by telephone authorizations.

Items from the Order that provide some clarity to this somewhat reluctant scheduling change include:

Now that Epidiolex has been approved by the FDA, it has a currently accepted medical use in treatment in the United States for purposes of the CSA. Accordingly, Epidiolex no longer meets the criteria for placement in schedule I of the CSA.

Nonetheless, DEA did seek such an evaluation and recommendation from HHS [to reschedule Epidiolex, which alternatively could have been automatically been moved to a more restrictive classification, schedule II] with respect to the Epidiolex formulation. In responding to that request, HHS advised DEA that it found the Epidiolex formulation to have a very low potential for abuse and, therefore, recommended that, if DEA concluded that control of the drug was required under the Single Convention, Epidiolex should be placed in schedule V of the CSA. . . . Namely, I am hereby ordering that the Epidiolex formulation (and any future FDA-approved generic versions of such formulation made from cannabis) be placed in schedule V of the CSA.

Under the scheduling order, the United States will continue to meet this obligation [quotas to require licensed manufacturers of drugs with schedule I substances to specify the amounts of the drugs they may manufacture to prevent excessive production or accumulation beyond necessary to satisfy “legitimate needs”] because the bulk cannabis material used to make Epidiolex formulation (as opposed to the FDA-approved drug product in finished dosage form) will remain in schedule I of the CSA and thus be subject to all applicable quota provisions under 21 U.S.C. § 826.

The Order further explained that it was not necessary for the Attorney General to issue a scheduling order for Epidiolex through normal notice-and-comment rulemaking according to the Administrative Procedure Act (APA), because the FDA approval of Epidiolex represented an expedited scheduling action.

As we noted previously, by statute, the DEA had 90 days from the approval date (technically September 23, a Sunday or the next business day September 24) to issue a scheduling decision, even though it could have potentially opted for the full APA process scheduling process, which would have taken much longer.

As we had originally contemplated, the DEA chose to limit its scheduling inquiry to the specific Epidiolex formulation and product rather than opting to revisit the control of CBD generally for products with low or minimal THC (the hallucinogenic compound in cannabis). And even if the DEA completely de-scheduled CBD, this decision would not change the legal status of CBD under the Food, Drug, and Cosmetic Act or many state laws.

So while some had hoped that the inevitable DEA rescheduling of Epidiolex would send a signal that CBD products could be marketed more widely or with some limited health claims, instead it appears that any health claim related to CBD or other components of cannabis will now require FDA review as a “drug” prior to marketing approval and both FDA and DEA review for abuse potential for rescheduling.

In the interim, the FDA is likely to continue to use its limited enforcement resources to target companies marketing CBD products with health claims akin to a drug rather than target every manufacturer of CBD-containing products, however, because the CBD market has expanded into new products and at levels where a more targeted approach is warranted and more feasible.