A stroll through the corner drug store or mall would lead many to believe that cannabidiol (CBD) products are perfectly legal and a miraculous panacea. But just because it’s sold everywhere does not mean it’s legal to do so. There are a number of legal concerns that businesses should investigate before producing, marketing, or selling CBD products.

First, where does the CBD come from, hemp or marijuana? CBD can be extracted from either. Hemp, which has low levels of THC (tetrahydrocannabinol), is legal nationwide. Marijuana, on the other hand, has high levels of THC and is still illegal under federal law. The federal government is not pursuing marijuana enforcement in states that have legalized marijuana, but Virginia is not one of those states. Virginia only has an affirmative defense to prosecution for possession, in very limited circumstances, of CBD oil or THC acid for medical purposes. Otherwise, marijuana—and CBD derived from it—remains illegal in Virginia and illegal to transport across state lines.

Even if CBD is derived from hemp, businesses need to be aware of the conflicting and confusing state of the law. Under federal law, it is still illegal to place CBD in any product intended for human consumption. CBD cannot be marketed as a dietary supplement. Foods to which CBD has been added cannot be shipped in interstate commerce. The FDA is considering whether and how it might allow hemp-derived CBD as a food additive or dietary supplement, but that has not happened yet.

The FDA has issued numerous warning letters to firms selling unapproved CBD products with claims to treat or prevent diseases. The FDA has discovered—not surprisingly—that some products labeled as containing CBD may have no CBD, may contain a different amount of CBD than claimed on the label, or may contain other substances, such as THC, not disclosed on the label.

Despite the illegality under federal law and the FDA’s concerns, CBD products have flourished nationwide, and Virginia businesses are eager to jump on board. Virginia has stepped into the breach by providing an avenue for Virginia hemp processers to bring hemp-derived extracts, such as CBD, to market. Pursuant to guidance from the Virginia Department of Agriculture and Consumer Services (VDACS), registered industrial hemp processors can produce CBD as an approved food ingredient or approved dietary supplement if they meet specific requirements. They must comply with laws and regulations pertaining to food manufacturing and dietary supplements, including 21 C.F.R. Part 110 and Part 111. They cannot label or market foods as supporting human health or as a treatment for a medical condition. There are several other, detailed requirements, including specific standards developed by the Virginia Board of Pharmacy and standards regarding pesticide residue. The VDACS may conduct random testing of hemp products intended for human consumption and may inspect food businesses and dietary supplement manufacturers.

Although the CBD industry is booming, before jumping in, businesses should carefully evaluate the law with regard to the specific product they want to manufacture or sell.