CBD, or cannabidiol, is a compound in the cannabis plant that does not cause the psychoactive or hallucinogenic effect of tetrahydrocannabinol (THC). It is being widely studied, marketed, and reported as having beneficial effects on numerous diseases and conditions, such as anxiety, pain, inflammation, nausea, seizures, and opioid use disorder. Simply put, the words “trending” or “buzzworthy” do aptly describe its current status on the market — based on its growing demand, the CBD market is predicted to be valued at more than $20 billion by 2020. Much of that is being driven by a movement in the food, beverage, dietary supplement, and personal care product industries to develop products containing CBD. Yet, countless companies jumping on the CBD bandwagon do not know or understand the federal and state regulatory status and implications of using CBD as a food or dietary supplement, and often worse, are not contemplating litigation risks posed by marketing and selling such products.

The Agriculture Improvement Act of 2018 (2018 Farm Bill), which was signed into law on December 20, 2018, changes certain federal laws relating to the production and marketing of hemp, defined generally as any portion of the cannabis plant with up to 0.3 percent of THC on a dry weight basis. While the major change of the 2018 Farm Bill is the removal of hemp from the Federal Controlled Substances Act (CSA), the law does not impact the U.S. Food and Drug Administration’s (FDA’s) authority to regulate cannabis and cannabis-derived products.

Current FDA laws prohibit the use of CBD and THC in food and dietary supplements, including hemp and hemp-derived products, because such compounds are active ingredients in approved drugs and have been the subject of substantial clinical investigations. To date, New York City’s Department of Health  and several states, including California, Maine, and Ohio, have instituted bans on and taken enforcement actions related to food products containing CBD. As of last December, FDA has favorably responded to Generally Recognized As Safe (GRAS) Notifications for certain uses of three hemp-seed derived ingredients — hulled hemp seeds, hemp seed protein, and hemp seed oil — in food products.

On Thursday, March 28, outgoing FDA Commissioner Scott Gottlieb informed lawmakers that FDA is exercising “enforcement discretion” regarding the use of CBD in certain FDA-regulated products. In his remarks, Commissioner Gottlieb noted that FDA’s enforcement priorities will target marketers making unapproved drug claims for the use of such products to cure, treat, or prevent serious diseases and conditions, such as cancer or Alzheimer’s. On that same day, FDA and FTC jointly issued warning letters to three CBD companies that focused on the unapproved drug claims related to their CBD products.Specifically, the three 2019 warning letters noted that the CBD products involved, including infused gummies, isolate, oil, and products for dogs, claimed to treat Alzheimer’s disease, anxiety, depression, skin conditions, and inflammation. In 2018, only one warning letter was issued regarding CBD. The 2018 warning letter was sent to a CBD manufacturer related to issues with their manufacturing process and their unapproved drug claims, which included statements on their website that CBD products could treat Alzheimer’s disease, cancer, Crohn’s disease, diabetes, and glaucoma, among others.

From 2015 to 2017, FDA issued over 40 warning letters to manufacturers of CBD products, including oils, capsules, and gummies, for making such disease claims. In some of these warning letters, FDA had tested the chemical content of CBD in the products and reported that many did not contain the levels claimed in product labeling.

In addition, on various occasions throughout 2018, the Agency reiterated its enforcement priorities regarding the marketing of such products for serious, unproven disease claims. For example, in June of 2018, FDA stated, “[W]e are prepared to take action when we see the illegal marketing of CBD-containing products with serious, unproven medical claims. Marketing unapproved products, with uncertain dosages, and formulations can keep patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.”

Following the passage of the 2018 Farm Bill in December 2018, Commissioner Gottlieb stated that FDA would consider issuing a regulation, after notice and comment, approving the use of CBD to be marketed in food or as a dietary supplement. In remarks to the House Appropriations Committee on February 27, 2019, Commissioner Gottlieb informed lawmakers that FDA would appoint a working group to consider the Agency’s options for cannabis-derived ingredients, including hemp, in food and dietary supplements following a public meeting the Agency plans to conduct as early as this month. In a recent interview, Commissioner Gottlieb separately noted that it would likely take several years for the Agency to devise rules that would legalize the use of hemp-derived CBD in food products unless Congress does, in fact, step in.

In light of the increasing interest in CBD and other cannabis-derived products, on April 3, 2019, FDA announced it will hold a public hearing on May 21, 2019 to obtain additional scientific data and other information to inform its regulatory oversight of such products. FDA encourages public comments and presentations at the public hearing on the following considerations for such products: health and safety risks; manufacturing and product quality; and marketing, labeling, and sales. All requests to make presentations during the hearing must be submitted to FDA by the close of registration on May 10, 2019.

Companies currently selling or developing products containing CBD should continue to monitor FDA regulatory activity in relation to the compound, but an ambiguous state of regulation does not mean companies are free and clear of risk for manufacturing, marketing, or selling CBD products, even without unapproved drug claims. In fact, the lack of clear regulation typically creates a grey area that plaintiffs’ attorneys love to exploit by way of civil litigation, either in the form of consumer class actions for false advertising or true product liability claims and lawsuits. Issues specific to CBD are ripe for these types of legal action, including sourcing and quality control, potency and dosing, and perhaps the most controversial of all — access and appeal to children.