On December 20, 2018, the Agricultural Improvement Act (“AIA”) of 2018 was signed into law. Among the changes made within the AIA was the long-awaited legalization of industrial hemp. The AIA removes hemp (defined as cannabis and derivatives of cannabis with less than 0.3% THC on a dry weight basis) from the Controlled Substances Act (“CSA”). This removal of hemp from the CSA means that hemp is no longer an illegal substance under federal law.
Although this is certainly a significant, historical step by the federal government, it remains to be seen how the FDA will choose to regulate legalized hemp. In a recent statement
, the FDA made it clear that “Congress explicitly preserved the [FDA’s] current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (“FD&C”) and section 351 of the Public Health Service Act.
” The FDA clarified that it “treat[s] products containing cannabis or cannabis-derived compounds as [it does] any other FDA-regulated products – meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance
” and that it will “continue to closely scrutinize products that could pose risks to consumers,
” including by warning consumers and taking enforcement actions.
Many entrepreneurs will jump at the opportunity to enter the newly legal hemp market and to create hemp-derived CBD-based products, however, the regulatory framework and path to entry into this market remains currently undeveloped. In it’s statement, the FDA clarified:
“[I]t’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. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.“
The FDA then went on to state that:
“While products containing cannabis and cannabis-derived compounds remain subject to the FDA’s authorities and requirements, there are pathways available for those who seek to lawfully introduce these products into interstate commerce. The FDA will continue to take steps to make the pathways for the lawful marketing of these products more efficient. These pathways include ways for companies to seek approval from the FDA to market with therapeutic claims a human or animal drug that is derived from cannabis. For example, in June 2018, the FDA approved a drug, Epidiolex, that contains cannabis-derived CBD for the treatment of seizures associated with two rare and severe forms of epilepsy. That approval was based on adequate and well-controlled clinical studies, which gives prescribers confidence in the drug’s uniform strength and consistent delivery that support appropriate dosing needed for treating patients with these complex and serious epilepsy syndromes.“
It follows that concern may arise regarding how the FDA will regulate hemp, and whether it will impose significant barriers to entry for small businesses; for example, given its recent statement, the FDA could require all producers of hemp-derived CDB-based products to participate in “substantial clinical investigations” before they can bring products to market. Such an outcome would significantly impede the ability of small businesses to enter this market, and would leave the market open to large pharmaceutical companies equipped to handle such clinical trials and investigations.
Furthermore, the FDA left open the possibility that hemp-derived CBD-based products may be regulated in such a way that entrepreneurs running small businesses may not have such barriers to entry. The FDA stated that:
“In addition, pathways remain available for the FDA to consider whether there are circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement. Although such products are generally prohibited to be introduced in interstate commerce, the FDA has authority to issue a regulation allowing the use of a pharmaceutical ingredient in a food or dietary supplement. We are taking new steps to evaluate whether we should pursue such a process. However, the FDA would only consider doing so if the agency were able to determine that all other requirements in the FD&C Act are met, including those required for food additives or new dietary ingredients.“
Given that the FDA has the authority to issue regulations allowing the use of a pharmaceutical ingredient in a food or dietary supplement, hopefully, the FDA will pursue a process that allows the such a use, without the significant requirements of substantial clinical investigations. Such a process is vital to ensure that all potential businesses have the opportunity to enter the legal hemp marketplace, including small businesses, and not solely large pharmaceutical companies.